HomeBusinessTrump suffers a $2 billion hit as Truth Social's stock collapses

Trump suffers a $2 billion hit as Truth Social’s stock collapses

The trade initially propelled Donald Trump into the ranks of the world’s 500 richest people – Shannon Stapleton/REUTERS

Donald Trump has suffered a $2 billion hit to his fortune after shares in his company Truth Social fell by almost a quarter.

Trump Media & Technology Group (TMTG) – the parent company of Trump’s social media platform – saw its shares tumble after revealing it lost $58m (£46m) last year on revenues of just $4.1m. That compares to a market value of $6.3 billion.

The company also warned of “substantial doubt that TMTG will have sufficient resources to meet its obligations as they mature.”

The financial revelations led to a sell-off, sending shares in TMTG down about 24%.

It comes just a week after the company began trading on the Nasdaq following a merger with a publicly traded cash shell. Shares rose more than 50% after the deal closed and TMTG began trading under the ticker DJT.

Truth Social had published only limited details of its 2023 financial performance prior to the completion of the merger.

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When TMTG debuted, the rise in its stock price had put Trump into the ranks of the world’s 500 richest people thanks to his 57.3 percent stake in the company.

However, the collapse in the company’s stock price saw the value of his position in TMTG drop from about $5.5 billion last week to about $3.5 billion on Monday evening.

Under the terms of the listing agreement, Trump cannot sell shares in the company for six months.

The value of his stake is seen as an important financial lifeline. Trump is facing mounting legal and financial troubles, including a criminal lawsuit over so-called “hush money” payments to a porn star, Stormy Daniels, ahead of the 2016 election. He was fined $454 million for fraudulently investing his wealth manner, although that fine was later reduced.

Truth Social was founded by Mr. Trump in 2021 after the former president was banned from Twitter (now X) in the wake of the January 6 attack on the Capitol by his supporters. His account was reinstated following Elon Musk’s $44 billion acquisition of Twitter in 2022, but he has only posted to it once since.

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Truth Social bills itself as an alternative to Twitter and other platforms like Facebook, but with less moderation, describing itself as a “big tent” platform with an emphasis on freedom of expression. Mr. Trump is a frequent user, often posting several times a day.

In a document on Monday, TMTG management said that “sticking to traditional key performance indicators, such as sign-ups, average revenue per user, ad impressions and pricing, or active user accounts including monthly and daily active users, could potentially distract from attention” from growth.

TMTG’s merger with specialty acquisition vehicle Digital World Acquisition Group gave the social media platform a cash infusion of nearly $300 million. It came after TMTG warned of possible bankruptcy without a deal.

Although Mr. Trump is not currently a director of the company, his son, Donald Trump Jr., sits on the board.

TMTG was contacted for comment.

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