Trump Media Lost $327.6 Million In First Quarter, Ex-President Loses $766 Million As Shares Drop Again

Trump Media and Technology Group Shares, Donald Trump’s media company, have plummeted again after it reported losing $327.6 million in the first quarter of 2024.

The firm reported that TMTG, the parent company of Trump’s Truth Social site, had revenues that barely reached $770,500.

Since Friday’s market close, the company has been witnessing its share price drop of 13.2% to $44.19, a figure weakening from its peak of almost $72 during its initial public offering in March.  The stock had declined 8.6%.

The price crash has cost the former president, who owns 114,000,000 shares in TMTG, over $766 million.

Trump owns almost 65% of the company, valued at nearly $6 billion.

Company officials stated that the first quarter results reflect the complications of a deal in March to merge with Digital World Acquisition Corporation. This special purpose acquisition company allowed Trump’s company to be publicized via merger.

“After an unprecedented, years-long process, we have consummated our merger and dispensed with the vast bulk of merger-related expenses, leaving the Company well-capitalized and supported by a legion of retail shareholders who believe in our mission to provide a free-speech beachhead against Big Tech censorship,” TMTG Corp CEO Devin Nunes mentioned in a statement delivered on May 20, which can be found in a TMTG report.

The merger cost the company $311 million in non-cash expenses.

Despite revenues of less than $1 million and an active U.S. mobile user base barely above 100,000 people, TMTG is valued at over $7 billion, comparable to a massive tech company, even though rivals like X have hundreds of times more users.

The company’s report revealed that the impairment for the three months ending in March equals a net loss of $3.61 per share.

The report’s disclosure came at a very delicate time for the company.

TMTG fired its auditor, B.F. Borgers was accused of “massive fraud” by the Securities and Exchange Commission in early May.

For a similar reason, the revelation of the financial report was delayed.

The revelation also occurred during Trump’s legal and billing terms.

Despite the poor revenue and subsequent stock decline, the company blamed the losses on non-cash expenses resulting from converting notes and eliminating previous liabilities, stating that the current business focuses on developing products for the future.

“In the first quarter, the Company recorded $311.0 million in non-cash expenses arising from the conversion of promissory notes, and the associated elimination of prior liabilities, immediately before the closing of TMTG’s merger with DWAC on March 25, 2024,” the report added. “These non-cash expenses resulted in a GAAP loss of $327.6 million for the first quarter.”

The report mentioned that “at this early stage in the Company’s development, TMTG remains focused on long-term product development, rather than quarterly revenues.”

“By adding features to Truth Social, launching live TV streaming, and building out its ecosystem, the company aims first to develop a slate of best-in-class products that can then be leveraged to increase revenue and drive long-term value,” it went on to say.

The company announced that it might keep reporting losses shortly.

In its report, Trump Media noted that before it went public, it “historically incurred operating losses and negative cash flows from operating activities.”

As a result, the company “expects to continue to incur operating losses and negative cash flows from operating activities for the foreseeable future, as it works to expand its user base and attract more platform partners and advertisers.”

During an episode of CNBC’s Squawk Box on April 4, billionaire media mogul Barry Diller criticized Trump Media, calling it a “scam” after the company’s then-recent public listing.

After the company began trading in late March, its shares increased to over $79. Despite this, the stock has since plummeted to $46 per share as of the night of April 4. TMTG reported revenue of $4.1 million and a massive loss of almost $58.2 million in 2023.

Diller also mentioned that “the company has no revenue” and called its investors “dopes.”

In early April, two TMTG investors, Michael Shvartsman and his brother, Gerald Shvartsman, pleaded guilty to an insider trading scheme connected to the high-profile public listing of Truth Social.

According to federal prosecutors, the Shvartsman brothers pleaded guilty in a New York court to one count of securities fraud, which carries a maximum prison sentence of 20 years.

The brothers’ arrests took place in June 2023 after accusations surfaced of unlawful trading based on private information about a shell company’s confidential plan to obtain TMTG.