The financial future of Trump Media and Technology Group DJT, the publicly traded company of former President Donald Trump, is under scrutiny after an auditor raised concerns about its viability.
What Happened: The Securities and Exchange Commission received a regulatory filing from Trump Media, which runs the Truth Social platform, revealing a loss of $58.18 million in 2023 against total revenues of $4.13 million.
Moreover, interest payments of the company amounted to $39.43 million.
“The increase was due primarily to the accreted interest (which adds to the balance) related to TMTG's convertible promissory notes recorded as of December 31, 2023,” the filing mentioned.
BF Borgers CPA PC, a Colorado-based accounting firm, highlighted in the filing that the “operating losses raise substantial doubt about its ability to continue as a going concern,” as reported by NBC News on Monday. This statement was made just a day before the company started trading on the Nasdaq stock exchange under the symbol DJT.
A representative from Trump Media redirected Benzinga’s inquiry for comment to a news release issued on Monday. In the statement, despite these financial setbacks, Trump Media CEO and former U.S. Rep. Devin Nunes has stated that Truth Social is debt-free and has over $200 million in the bank, which opens up numerous opportunities for platform expansion and improvement.
However, the company admitted in the filing that it anticipates operating at a loss for the “foreseeable future” as it strives to grow Truth Social’s user base and attract more advertisers.
"We are excited to be operating as a public company and to have secured access to capital markets. Closing out the 2023 financials related to the merger, Truth Social today has no debt and over $200 million in the bank, opening numerous possibilities for expanding and enhancing our platform. We intend to take full advantage of these opportunities to make Truth Social the quintessential free-speech platform for the American people," Nunes said.
Why It Matters: Analysts have speculated that the company’s value would nosedive if Trump decided to sell his shares. They also anticipate stock volatility as Trump’s legal and political fortunes fluctuate while he pursues a new term in the White House.
Tom Sosnoff, CEO of Tastytrade, predicted a challenging road for Trump Media’s stock, with significant downside potential. This prediction followed a substantial drop in Trump’s net worth after his social media company disclosed tens of millions in losses last year.
On Monday, shares of the company closed at $48.66, a 21.47% drop from its previous close as Benzinga Pro.
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