The former US president Donald Trump’s social media network Truth Social is owned by Trump Media and Technology Group, which reported losses of more than $300 million for the first quarter of 2024 on Monday.
According to a business release, TMTG, which just went public, reported a net loss of $327.6 million from January to March, as opposed to $210,300 in net losses during the same period previous year.
Just $770,500 in sales were made during the quarter by TMTG, whose main asset is the Truth Social network that Trump formed after he was banned from Twitter and Facebook in 2021.
According to some analysts, TMTG is similar to “meme stocks,” whose values are frequently influenced more by public support than by a company’s viability or mission.
TMTG began publicly trading on the Nasdaq on March 26, meaning the Republican White House candidate’s media group is now obligated to publish quarterly results.
Trump holds 57.3 percent of TMTG, which merged with a shell company known as Digital World Acquisition in late March.
These kinds of special purpose mergers are frequently utilized to help start-up companies swiftly have their shares listed on a public exchange. In these kinds of deals, equity investors usually have to hold the shares for six months before they can cash out.
The great bulk of the quarterly losses, according to TMTG, were attributed to $311 million in non-cash charges that took place before the merger with Digital World, including the removal of existing liabilities.
The $6.3 million in merger closing costs resulted in an operational loss of $12.1 million for Q1—nearly four times the operating loss from the same period last year.
“As of April 29, 2024, the company’s stock was held by over 621,000 shareholders, the vast majority of whom are retail investors,” it said in the statement.
Soon after making its Wall Street debut, TMTG’s share price fell by more than 70% before rising again in mid-April.
Trump’s financial assets lost numerous billions of dollars as a result of the decline.
Devin Nunes, the CEO of TMTG and a former Republican congressman, has accused hedge funds of breaking the law by manipulating the market to lower the value of TMTG’s shares.
Nunes stated in the statement released on Monday that the business is “well-capitalized.”
“Our positive working capital allows us to explore and pursue a wide array of initiatives and innovations to build out the Truth Social platform including potential mergers and acquisitions activities,” as well as options such as live TV streaming, he added.
