Trump Media Group faces financial uncertainty; stock prices plummet

Trump Media Group faces financial uncertainty; stock prices plummet

(Reuters) – Shares of Trump Media & Technology Group fell nearly 18% on Monday as the parent company of the Truth Social platform raised doubts about going concern due to difficulties meeting its financial debts just days after going public via a blank check merger.

The company reported a net loss of $58.2 million in the fiscal year ending December 2023, compared with a net profit of $50.5 million a year earlier. Revenue was $4.13 million last year, compared to $1.47 million in 2022, it said in a filing.

“As of December 31, 2023 and 2022, management had serious doubts whether TMTG would have sufficient funds to meet its debts as they become due, including debts related to promissory notes previously issued by TMTG,” the company said.

Trump Media said it expects to experience operating losses and negative cash flow from its operations for the foreseeable future as it strives to expand its user base, attracting more platform partners and advertisers.

Its shares gained more than 16% on its first day of trading on March 26, as retail investors, including supporters of former President Donald Trump, rushed into the stock.

But the stock has since seen choppy trading, falling for the second straight session on Monday.

Separately, on Monday, a Delaware judge said he wants the company and Trump Media co-founders Wesley Moss and Andrew Litinsky to set a date this month for a hearing to determine whether the two should receive the 8.6% stake in the company they claim to own. of.

Trump Media and the two men sued each other in state courts in Delaware and Florida.

The co-founders accused Trump Media of trying to unduly dilute their stake. The company said it had failed to win its shares and was seeking to strip them of ownership and wanted a judge to rule that it had no right to appoint two board members. ‘administration.

(Reporting by Yuvraj Malik in Bengaluru; additional reporting by Tom Hals in Wilmington, Delaware; editing by Arun Koyyur and Anil D’Silva)

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