President Trump experiences $2 billion loss as Truth Social stock plunges

President Trump experiences  billion loss as Truth Social stock plunges

Trade initially propelled Donald Trump into the world’s 500 richest people – Shannon Stapleton/Reuters

Donald Trump suffered a $2 billion hit after shares of his company Truth Social fell by almost a quarter.

Trump Media & Technology Group (TMTG) – the parent company of Mr Trump’s social media platform – saw its shares fall after revealing it lost $58m (£46m) last year on a turnover of only $4.1 million. This compares to a market value of $6.3 billion.

The company also warned of “substantial doubt as to TMTG’s ability to have sufficient funds to meet its debts as they become due.”

The financial disclosures sparked a sell-off that saw TMTG shares fall around 24%.

This comes only a week after the company started trading on Nasdaq following a merger with a listed company. Shares soared more than 50% after the deal closed and TMTG began trading under the ticker DJT.

Truth Social had released only limited details about its 2023 financial performance before the merger was finalized.

When TMTG debuted, the soaring stock price had propelled Mr. Trump into the world’s 500 richest people thanks to his 57.3% stake in the company.

However, the collapse in the company’s stock price reduced the value of its position in TMTG from about $5.5 billion last week to about $3.5 billion as of late Monday.

Mr. Trump is unable to sell shares in the company for six months, under the terms of the listing agreement.

The value of his stake was seen as a key financial lifeline. Mr. Trump is facing growing legal and financial difficultiesincluding a criminal trial involving so-called “hush money” payments to a porn star, Stormy Daniels, before the 2016 election. He was fined $454 million for fraudulently inflating his net worth , although this fine was later reduced.

Truth Social was founded by Mr. Trump in 2021 after the former president was banned from Twitter (now X) following the January 6 attack on the Capitol by his supporters. His account was reinstated following Elon Musk’s $44 billion buyout of Twitter in 2022but he’s only posted there once since.

Truth Social presents itself as an alternative to Twitter and other platforms like Facebook, but with less moderation, describing itself as a “big tent” focused on free speech. Mr. Trump is a frequent useroften posting several times a day.

In a filing Monday, TMTG management said that “sticking to traditional key performance indicators, such as registrations, average revenue per user, ad impressions and pricing, or customer accounts “active users, including monthly and daily active users, could potentially distract its attention.” of growth.

TMTG’s merger with special purpose acquisition vehicle Digital World Acquisition Group netted the social media platform a cash infusion of nearly $300 million. The move came after TMTG warned of possible bankruptcy without a deal.

Although Mr. Trump is not currently a director of the company, his son, Donald Trump Jr., serves on its board.

TMTG has been contacted for comment.

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