Trump Media and Technology Group, the owner of former President Donald Trump’s social networking site Truth Social, has reported staggering losses of more than US$300 million (NZ$491 million) in the last quarter, according to its first earnings report as a publicly traded company.
For the three-month period ending March 31, the company posted a loss of US$327.6 million (NZ$536.4 million), which included US$311 million (NZ$509 million) in non-cash expenses related to its merger with Digital World Acquisition Corp. Digital World Acquisition Corp was essentially a pile of cash seeking a target to merge with, an example of a special purpose acquisition company (SPAC), which can provide young companies with quicker and easier routes to becoming publicly traded.
In contrast, a year earlier, Trump Media had reported a relatively modest loss of US$210,300 (NZ$344,374).
Despite the substantial losses, Trump Media reported generating US$770,500 (NZ$1.2 million) in revenue during the first quarter, largely from its “nascent advertising initiative.” This figure, however, represents a decline from the US$1.1 million (US$1.8 million) in revenue recorded a year earlier.
In its earnings news release, Trump Media acknowledged that at this early stage of the company’s development, the focus remains on long-term product development rather than quarterly revenue.
The company’s financial woes have been compounded by recent controversies, including the termination of an auditor that federal regulators had charged with “massive fraud.” Earlier this month, Trump Media dismissed BF Borgers as its independent public accounting firm on May 3, delaying the filing of the quarterly earnings report, according to securities filings.
Trump Media’s auditor troubles extend further, with the company having previously cycled through at least two other auditors – one that resigned in July 2023, and another that was terminated by the board in March, just as it was re-hiring BF Borgers.
Despite the challenges, shares of Trump Media climbed 36 cents to US$48.74 (NZ$79.81) in after-hours trading. The stock, which trades under the ticker symbol “DJT,” began trading on Nasdaq in March and peaked at nearly US$80 (NZ$131) in late March.
As Trump Media navigates these turbulent waters, the company’s ability to sustain its operations and achieve profitability remains uncertain, with significant hurdles lying ahead.
