Former President
Donald Trump said Thursday that media fixation on the $58 million loss of the company behind Truth Social is misguided, touting its fundamentals—which he said include over $200 million cash and no debt—as “very solid.” Official first-quarter financial information for Trump Media & Technology Group, the parent company of Truth Social, isn’t available yet. This meant that President Trump, who owns around 57 percent of the combined company, on paper became over $4 billion richer, though a lock-in arrangement prevents him from selling his shares for six months. Word of the loss sent Trump Media shares plunging by roughly 20 percent to around the $45 mark, a price around which it’s traded sideways until today, at a market cap of around $6.3 billion. The merger with DWAC gave Trump Media a $300 million cash infusion, with the company notching $4.1 million in revenue last year. Trump Media executives said in Monday’s 8-K filing that they expect the company to continue taking losses as they burn through some of that cash in order to aggressively expand Truth Social’s user base. “TMTG 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, attracting more platform partners and advertisers,” the company said in the filing. President Trump’s stake in the company is now worth roughly $3.8 billion. Trump Media’s meteoric rise and subsequent wobble has sparked massive interest in shorting the stock—meaning betting money on its potential price decline. They said they’ve already started testing “a particular, state-of-the-art technology that supports video streaming and provides a ‘home’ for cancelled content creators,” which Trump Media aims to acquire soon and incorporate into its offering. “Such initiatives and potential acquisitions are still preliminary and subject to material changes and risks, some of which are beyond TMTG’s control,” the company stated. “Given these uncertainties, TMTG believes it is premature for TMTG to predict when it will attain profitability and positive cash flows from its operations.” Trump Media executives noted that the platform’s success depends in part on the popularity of its brand and the reputation of President Trump. “The value of TMTG’s brand may diminish if the popularity of
President Trump were to suffer,” the executives wrote in Monday’s 8-K filing. “Adverse reactions to publicity relating to President Trump, or the loss of his services, could adversely affect TMTG’s revenues, results of operations and its ability to maintain or generate a consumer base.” It’s a message the former commander-in-chief appears to have taken to heart, with his posts on Thursday touting the impact of the Truth Social platform and blasting its detractors. “All of the competitors to TRUTH SOCIAL, especially those in the Radical Left
Democrats Party who are failing at every level, like to use their vaunted ‘disinformation machine’ to try and convince people, and it is not easy to do, that TRUTH is not such a big deal and doesn’t ‘get the word out’ as well as various others, which they know to be false,” President Trump wrote in one of his posts. “It is the primary way I get the word out and, for better or worse, people want to hear what I have to say, perhaps, according to experts, more than anyone else in the World,” he wrote, adding that competing
Social Media platforms, which he said canceled him for largely political reasons, would love to have him back. “Look, using TRUTH, I became the
Republican Nominee for President of the
United States, and in record time! When I ENDORSE a politician on TRUTH, they almost ALWAYS WIN,” he continued, adding that if the platform didn’t work to get the message out, he wouldn’t use it. Meanwhile, as President Trump paints the fate of Truth Social in bright colors, there appears to be no shortage of investors willing to bet on its demise. “They are looking for this stock to crater and crater very quickly,” Ihor Dusaniwsky, managing director of predictive analytics at S3, told The
New York Times of the big interest in shorting Trump Media.