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Trump Media Stock Falls as New Documents Reveal Heavy Losses and ‘Greater Risks’ to Trump’s Involvement

Trump Media & Technology Group (DJT), the parent company of Donald Trump’s social media platform Truth Social, fell more than 22% in afternoon trading on Monday after its blockbuster debut last week.

The stock drop follows an updated regulatory filing early Monday that showed the company was suffering heavy losses and facing “increased risks” related to the former president’s ties to the platform.

According to the filing, Trump Media reported revenue of just over $4 million, while net losses were nearly $60 million for the full year ended December 31. The company warned that it expects losses to continue amid heightened profitability challenges.

“TMTG has historically suffered operating losses and negative cash flows from operating activities,” the filing said.

“TMTG expects to continue to incur operating losses and negative cash flows from operations for the foreseeable future as the company seeks to expand its user base and attract more platform partners and advertisers.”

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Truth Social has attracted approximately 9 million users since its inception. But its success largely depends on the “reputation and popularity” of former President Donald Trump.

“TMTG may be subject to greater risks than typical social media platforms due to the focus of its offering and President Trump’s involvement,” the company said, citing risks such as the harassment of advertisers and criticism of Truth Social’s moderation practices.

“The value of the TMTG brand could decline if President Trump’s popularity were to suffer.”

Notably, Trump Media revealed that it relies heavily on advertising, with ad sales contributing to a “substantial majority of our revenue.”

“If we experience a decline in the number of users or a decline in user engagement, including due to the loss of high-profile individuals and entities generating content on Truth Social, advertisers may not view Truth Social as attractive for their marketing spend and may reduce their spending with us, which would harm our business and operating results,” the company warned.

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The filing also revealed that stakeholders are still subject to a six-month lock-up period before selling or transferring shares.

Trump owns about a 60% stake in Truth Social, a stake currently worth more than $3 billion at current trading levels.

The opportunity to make money by selling some of his stake in the company could help the former president as he faces a $454 million fraud fine and struggles with a campaign fund shortage ahead of his election rematch against Biden in 2024.

The only exception to the lock-up period would be if the company’s board votes to grant a special dispensation. While possible, experts told Yahoo Finance last week that the attempt would likely result in multiple lawsuits on behalf of public shareholders.

Former US President Donald Trump arrives at 40 Wall Street after his hearing to set the date of his trial for allegedly covering up hush money payments related to extramarital affairs in New York City on March 25, 2024. Trump faces two legal charges today crises in New York York, where he could see the possible seizure of his legendary assets due to a huge fine, while separately fighting to delay a criminal trial even further.  (Photo by Charly TRIBALLEAU / AFP) (Photo by CHARLY TRIBALLEAU/AFP via Getty Images)

Former US President Donald Trump arrives at 40 Wall Street after his hearing to set the date of his trial for allegedly covering up hush money payments related to extramarital affairs in New York City on March 25, 2024. (Photo by CHARLY TRIBALLEAU/ AFP via Getty images) (CHARLY TRIBALLEAU via Getty Images)

Trump Media went public on the Nasdaq after merging with special purpose acquisition company Digital World Acquisition Corp. in a deal approved by shareholders late last month.

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The former president founded Truth Social after being kicked off major social media apps like Facebook and Twitter, the platform now known as

In the filing, Truth Social maintained its goal of providing a “home for canceled content creators” and a space to “have honest global conversations without fear of being censored or canceled” because of political views.

Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

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