The nosediving share price of the company — which uses the stock ticker DJT, for Trump’s initials — shaved hundreds of millions of dollars off both the company’s market value and Trump’s wealth, given that he owns about 57 percent of the firm.
The new financial figures throw into stark relief the gap between Trump Media’s highly hyped investor-driven valuation on the public stock market and the reality of its business performance.
Trump Media said in a filing that it expects to incur more “operating losses and negative cash flows” as it works to expand its user base but that it expects its growth will come from Truth Social’s “overall appeal.”
The company said in a filing that its management had “substantial doubt” as of the end of last year that it would have enough money to pay its debts as they come due. The company paid nearly $40 million in interest expenses last year and racked up about $16 million in operating losses.
Trump’s company unlocked nearly $300 million in investor funds last week when it finalized a merger deal with Digital World Acquisition, a special purpose acquisition company that helped take Trump Media public.
Trump Media said in a filing that it aimed to spend some of that money toward “strategic investments” in marketing, advertising sales and other technology. About $18 million of it was also paid toward a SEC settlement announced last year.
The company has declined to share performance indicators like those common across the tech industry, such as its number of active users. Focusing on those numbers, the company said, “might not align with the best interests” of Trump Media or its shareholders.
Trump Media, which makes money through advertising on Truth Social, has struggled to gain a broad audience after two years of operation, according to estimates from the online analytics firm Similarweb. On the company’s first day of public trading last week, Truth Social’s website saw its highest-traffic day of the month, with roughly 277,000 U.S. visitors, the estimates show.
That is a small fraction of most online platforms: On the same day, the discussion-board service Reddit saw more than 32 million U.S. visitors, the estimates show. Reddit, which recently went public and is trading at a similar stock price as Trump Media, generated $800 million in revenue last year, or more than 200 times Trump Media’s 2023 revenue.
Trump’s company said it has begun testing a “state-of-the-art technology that supports video streaming and provides a ‘home’ for canceled content creators,” which it “aims to acquire and incorporate into its product offerings and/or services as soon as practicable.” The company did not respond to a request for comment seeking further details.
Trump, who invested no money in Trump Media, owns a stake in the company worth about $4 billion. SEC filings last week said Trump was given 78 million shares of the company and stood to earn millions more over the next three years if the stock stayed above $12 to $17.
Trump can’t sell the shares for six months due to a provision in the company’s merger agreement, known as a lockup, unless the company’s board approves it. Cashing out early, however, could sink the stock price by flooding the market with shares and undermining investor confidence in Trump’s commitment to the brand, financial analysts said.
The board includes Trump’s son Donald Trump Jr.; Robert E. Lighthizer, Trump’s former trade representative; Linda McMahon, his former administrator of the Small Business Administration; and Kash Patel, who served on Trump’s National Security Council.
Trump Media’s chief executive, the former Republican congressman Devin Nunes, was given 115,000 shares, a stake worth more than $5 million today. He and other board members are bound by the same lockup agreement.
Nunes is paid a $750,000 salary that is subject to increase to $1 million within two years, filings show. The company’s two chief financial officers, Phillip Juhan and Andrew Northwall, are each paid about $350,000. Nunes, Juhan and Northwall will also each receive $600,000 “retention bonuses” this month.
Patel was paid $130,000 last year through a consulting agreement. Dan Scavino Jr., Trump’s White House social media director, was also paid $240,000 last year through a consulting agreement that listed him as an independent contractor, a filing shows. He, too, will be given a $600,000 retention bonus.
This is a developing story. Please check back for updates.