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Donald Trump (on March 24th)
Photo: Marco Bello / REUTERS
Observers speak of a bubble modeled on GameStop shares. Nevertheless, the first numbers after the Trump Media & Technology Group (TMTG) stock market debut last week were brilliant. TMTG's shares, which were placed at $49.95, rose to almost $67 on their first day of trading.
This Monday, however, the company behind the Truth Social network presented business figures - and the good mood could be over again. Because these numbers were anything but encouraging. As a consequence, TMTG's price fell by 21.5 percent. On paper, the largest stockholder Donald Trump lost more than a billion US dollars in one day. The value of his shares fell from 4.88 billion US dollars to 3.83 billion, as reported by the Guardian, among others. Trump owns almost 60 percent of the company.
The former US president's media company posted a loss of a good $58 million for its last financial year, with sales of around four million dollars. Much of that was interest expense, and about $16 million was operating expenses. When it comes to revenue, TMTG's figures show an improvement compared to the previous year; in 2022 they were just under $1.5 million. At that time, the company reported an annual profit of $50.5 million thanks to a tax credit.
Cult of personality drives many stock buyers
TMTG runs Trump's Truth Social, which competes for users and attention with services like X (formerly Twitter). The published figures suggest that the social media offering continues to struggle to attract advertisers. In the fourth quarter, TMTG even achieved lower income than in the previous quarter, at around $750,000.
Given its heavy losses in ongoing operations, the company warned that it could run out of money. However, this is a mandatory warning to investors that is common in the USA and is not necessarily followed by bankruptcy. Many of TMTG's investors are small investors who are either trying to support Donald Trump or profit from the cult surrounding him.
yikes