Trump ‘s social media company reports Q1 revenue amid $327.6M loss

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Trump Media & Technology Group (TMTG), the company behind Truth Social and affiliated with former President Donald Trump, reported $770,500 in revenue for the first quarter of 2024 and a significant net loss of $327.6 million.

Shares of TMTG, which aims to be a “safe harbour for free expression amid increasingly harsh censorship by Big Tech corporations,” began trading on Nasdaq on March 26, 2024, under the ticker symbol "DJT" following its merger with Digital World Acquisition Corp. (DWAC). At Monday’s closing price of $48.38 per share, TMTG’s market capitalization stands at approximately $6.6 billion.

Trump, owning about 64.9% of TMTG's outstanding shares, has a stake currently valued at about $5.5 billion. His holdings of 114.75 million shares include 36 million "earnout shares" finalised on April 26 as per the DWAC merger agreement. However, Trump is restricted from selling his TMTG shares for six months after the public trading commenced.

In Q1 2024, TMTG recorded $311 million in non-cash expenses from converting promissory notes and eliminating prior liabilities before closing the merger with DWAC. The company reported a $12.1 million operating loss based on adjusted EBITDA, with half of that stemming from one-time payments related to the merger. On a GAAP basis, the company reported an operating loss of $98.35 million for the quarter.

Despite the financial losses, TMTG emphasised its focus on long-term product development rather than quarterly revenue. The company aims to enhance Truth Social with new features, launch live TV streaming, and build an extensive digital ecosystem to increase revenue and drive long-term value. Their advertising initiative is also expected to evolve as the company implements its vision.

TMTG plans to launch a new live TV streaming platform for Truth Social’s Android, iOS, and web apps, followed by stand-alone OTT streaming apps for various devices and home TV.

As of March 31, TMTG reported $273.7 million in cash and cash equivalents, expressing confidence in its working capital to fund operations for the foreseeable future. Their quarterly report was reviewed by Semple, Marchal & Cooper, appointed as the independent registered public accounting firm effective May 4, 2024, after the SEC accused their previous auditor, BF Borgers, of “massive fraud.”

TMTG, which launched Truth Social in early 2022, has not disclosed its user base. The company believes that traditional performance metrics could detract from strategic evaluations of its business progress and growth.

Formed in 2021 after Trump was banned from major social media platforms, TMTG's success is closely tied to Trump’s brand popularity. The company acknowledges that adverse publicity or legal issues involving Trump could negatively impact their operations and user base.

Despite Trump's reinstated accounts on other platforms, he continues to favour Truth Social as his primary social media platform.