Truth Social Stock Plummets After Ugly Filing Reveals It Lost $58 Million Last Year

Isaac SchorrApr 1st, 2024, 2:39 pm
 

AP Photo/Evan Vucci

The stock price for Trump Media & Technology Group, the company owned by former President Donald Trump that operates the alternative social media platform Truth Social, plummeted on Monday after shooting up last week.

The price began to fall on Monday after an SEC filing revealed that the company pulled in just over $4 million in revenue and lost $58 million in 2023.

CNN’s Jim Acosta and Matt Egan reported on the nosedive late Monday morning:

ACOSTA: Trump’s media stock is down 18% right there, you can see it. It has been dropping throughout the morning. This comes after the company that owns Truth Social posted financial numbers this morning. CNN’s Matt Egan joins me now. Matt, this is no April Fools’ joke, but it might be making some fools out of investors out there.

EGAN: You know, Jim, it might be. We should note, though, that this stock really had been going up like a rocket ship until now. These new numbers are forcing a mini reality check. I say mini because despite the loss of 18% as we speak, we’re still talking about a stock that has skyrocketed about 200% so far this year. It spiked in January when Donald Trump ran away with the Iowa caucuses and up again as the company went public.

So here’s the latest numbers that are concerning investors. Truth Social owner Trump Media lost $58 million last year, and it generated very, very little revenue, just $4.1 million in revenue. Put some context around that figure of revenue, if you look back at what Twitter generated when it went public about a decade ago, in that final year when it went public: $665 million, more than 100 times what Trump Media has been able to rake in.

And some of this is not shocking because we know that Truth Social is struggling. I mean, it is shrinking. Monthly active U.S. users on iOS and Android down 51% year over year. It’s not just much smaller than Twitter, it’s even smaller than Threads. And I think all of this just underscores why there’s a lot of warnings out there about this stock, right? One professor told me it’s a bubble. Another basically called it a meme stock. So Jim, listen, we’re going to see this stock go up and down, because its valuation right now is very, very high.

The company’s decision to go public and resulting multi-billion dollar valuation on the company has been floated as a potential lifeline for Trump as he struggles to pay for various legal services and penalties as well as fund his presidential campaign. Analysts have warned, however, that the stock will lose much of its value once Trump begins to sell off any significant amount of his more than 78 million shares in it.

As of early afternoon on Monday, the stock price had fallen even further.

Tags: