An audit report has brought the financial stability of former President Donald Trump’s publicly traded company, Trump Media and Technology Group, into question. According to a recent regulatory filing, the company, which runs the Truth Social platform, reported a loss of $58.2 million in 2023 with revenues totaling $4.1 million. The largest expense listed was interest payments exceeding $39 million.
The filing includes a warning from independent accounting firm BF Borgers CPA PC stating that Trump Media’s operating losses raise doubts about its ability to continue as a going concern. This firm has been working with Trump Media since 2022. The note was dated March 25, the day before the company began trading on the Nasdaq stock exchange under the symbol DJT, initially surging and drawing comparisons to meme stocks.
However, on Monday, shares of the company dropped more than 21% to $48.66, with a market value of over $6.5 billion. Despite this, Trump Media CEO and former U.S. Rep. Devin Nunes emphasized the company’s current financial status, stating that Truth Social has no debt and over $200 million in the bank.
Looking ahead, the company acknowledges that it expects to operate at a loss for the foreseeable future as it aims to expand its user base and attract more advertisers. The filing also reveals that it might require bridge funding ranging from $5 million to $60 million. As of the end of 2023, Trump Media had approximately $2.6 million in cash on hand and total liabilities of $70.1 million.
Trump Media recently went public, giving the former president a paper net worth of around $7 billion. However, Trump is prohibited from selling his shares in the company for six months. Analysts warn that the value of the company could plummet if Trump decides to sell, potentially causing a 15% to 40% decline in the stock price. Additionally, trading in the stock is expected to be volatile as Trump’s legal and political fortunes evolve in his bid for a new term in the White House. Analysts have likened the company’s stock to a cryptocurrency, where investors are driven by the expectation of price appreciation and a sense of affiliation with the asset.
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