Today News

Trump Media shares plummet as new documents reveal heavy losses, Trump’s involvement faces ‘greater risk’


Trump Media & Technology Group (DJT) Shares of the parent company of Donald Trump’s social media platform Truth Social fell more than 21% on Monday Following a blockbuster debut last week.

Stocks fell following Updated supervision filing Earlier on Monday, the company suffered heavy losses and faced “increased risks” related to the former president’s ties to the platform.

arrive ArchiveTrump Media reported a net loss of nearly $60 million for the full year ended Dec. 31, on sales of just over $4 million. The company warned that losses are expected to continue amid greater challenges to profitability.

“TMTG has historically commenced operations with negative cash flow from operating loss-making activities,” the filing reads.

“TMTG expects to continue to experience operating losses and negative cash flow from operating activities for the foreseeable future as it works to expand its user base and attract additional platform partners and advertisers.”

Truth Social has attracted about 9 million users since its inception, but much of its success depends on the “reputation and popularity” of former President Donald Trump.

“Due to the focus of its product and President Trump’s involvement, TMTG may be subject to greater risks than typical social media platforms,” ​​the company said. Risks cited by the company include advertiser harassment and criticism of Truth Social’s moderation practices. .

“If President Trump’s popularity suffers, TMTG’s brand value could decline.”

It is worth noting that Trump Media revealed that the company relies heavily on advertising, with advertising sales contributing “the vast majority of our revenue.”

“If our user numbers decline or user engagement declines, including due to the loss of high-profile individuals and entities that generate content on Truth Social, advertisers may not view Truth Social as attractive for their marketing spend and may reduce their spend. spending on us, which will harm our business and operating results,” the company warned.

The documents also show that interested parties are still required to comply with a six-month lock-up period before selling or transferring their shares.

Trump remains abrasive 60% equity Truth Social’s shares are currently worth over $3 billion (based on current trading levels).

The opportunity to cash out by selling part of the company could help the former president as he faces $454 million in fraud fines and try to solve Inadequate campaign fundraising ahead of his 2024 election rematch with Biden.

The only exception to the blackout period is a special exemption voted by the company’s board of directors. Although it is possible, Experts told Yahoo Finance last week This attempt could result in multiple lawsuits from public shareholders.

Former U.S. President Donald Trump arrives at 40 Wall Street after a court hearing to set the date for his trial on charges of covering up hush payments related to an extramarital affair, March 25, 2024, in New York City. Trump faces a dual legal crisis in New York today, where he could see his storied estate potentially forfeited with hefty fines as he works alone to further delay a criminal trial.  (Photo by Charlie Triballe/AFP) (Photo by Charlie Triballe/AFP via Getty Images)

Former President Donald Trump arrives at 40 Wall Street after a court hearing to set a date for his trial on charges of covering up hush payments related to an extramarital affair, March 25, 2024, in New York City. (CHARLY TRIBALLEAU/AFP via Getty Images) (Charlie Triballo via Getty Images)

Trump Media after listing on Nasdaq merge Late last month, shareholders approved a deal with special purpose acquisition company Digital World Acquisition Corp.

The former president founded Truth Social after he was kicked out of major social media apps like Facebook and Twitter following the Jan. 6, 2021, Capitol riots, with the platform now known as X. Trump has since regained prominence on these platforms.

In the filing, Truth Social maintains its goal of providing “a ‘home’ for canceled content creators” and a space to hold “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.

Click here for the latest stock market news and in-depth analysis, including events affecting stock trends

Read the latest financial and business news from Yahoo Finance





Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button