Trump Media and Technology Group shares dropped sharply Monday after the company behind Truth Social disclosed that it had lost more than $58 million last year. The company announced a net loss of $58.2 million for 2023, with $4.1 million in revenue, CNBC reports. That's up from revenue of just $1.47 million in 2022, though the company reported a profit of $50.5 million that year. The company's stock jumped last week after it completed its merger with holding company DWAC. Donald Trump has a stake of 78.8 million shares that was worth more than $6 billion at one point last week, though it's now down to around $3.8 billion, according to CNN.
The stock price was down more than 20% by Monday afternoon. Truth Social user numbers are falling and accountants warned in Monday's Trump Media filing that the losses "raise substantial doubt about its ability to continue as a going concern," CNN reports. Analysts have compared Trump Media to so-called "meme stocks" like GameStop and AMC Entertainment, which also fell sharply on Monday, the AP reports.
Trump Media "expects to incur operating losses for the foreseeable future," according to Monday's filing. John Rekenthaler at financial research firm Morningstar argued last week that while the company's valuation "is extraordinarily steep," it is more like a cryptocurrency that a meme stock, because investors "feel an affiliation for the asset" and expect its value to grow for reasons not connected to cash flow. "Bitcoin owners are members of a club," he wrote. "So, too, are Trump Media investors, to an even greater degree. For them, DJT shares represent a currency by which they can express their beliefs and commitment." (More Trump Media and Technology Group stories.)
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