Trump Media stock tanks as new filing reveals heavy losses, ‘greater risks’ on Trump’s involvement

Trump Media & Technology Group (DJT), the parent company of Donald Trump’s social media platform Truth Social, sank more than 21% Monday following a blockbuster debut last week.

At Monday’s closing price of $48.66, Trump Media had a market cap of $6.65 billion, giving the former president a stake worth $3.8 billion. After the company’s public debut last week, Trump’s stake was worth just over $4.5 billion.

The stock drop comes on the heels of an updated regulatory filing early Monday that showed the company taking on heavy losses and facing “greater risks” associated with the former president’s ties to the platform.

According to the filing, Trump Media reported sales of just over $4 million as net losses reached nearly $60 million for the full year ending Dec. 31. The company warned it expects losses to continue amid greater profitability challenges.

“TMTG has historically incurred operating losses and negative cash flows from operating activities,” the filing read.

“TMTG expects to continue to incur operating losses and negative cash flows from operating activities for the foreseeable future, as it works to expand its user base, attracting more platform partners and advertisers.”

Truth Social has lured about 9 million users since its inception. But its success largely depends on the “reputation and popularity” of former President Donald Trump.

“TMTG may be subject to greater risks than typical social media platforms because of the focus of its offerings and the involvement of President Trump,” the company said, citing risks that include the harassment of advertisers and criticism of Truth Social’s moderation practices.

“The value of TMTG’s brand may diminish if the popularity of President Trump were to suffer.”

Notably, Trump Media revealed that it heavily relies on advertising, with ad sales contributing to a “substantial majority of our revenue.”

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“If we experience a decline in the number of users or a decline in user engagement, including as a result of the loss of high-profile individuals and entities who generate content on Truth Social, advertisers…

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