Trump Media & Technology Group, the owner of Truth Social, disclosed on Monday that it experienced a substantial loss of over $58 million and generated only a small amount of revenue in 2023. These financial figures have raised concerns among experts who question the company's multibillion-dollar valuation, likening it to the meme stock craze.
According to a regulatory filing, Trump Media reported a loss of $58.2 million in 2023, a stark contrast to the $50.5 million profit it made in the previous year. The company's revenue stood at just $4.1 million for 2023, showing a slight increase from $1.5 million in 2022.
The significant losses have prompted Trump Media's accountants to express doubts about the company's ability to sustain its operations, indicating a potential risk of not being able to continue as a going concern. This warning aligns with a previous caution issued in November, suggesting that Trump Media's survival may hinge on the completion of its merger to go public.
Despite the financial challenges, Trump Media recently finalized a long-awaited deal that will inject approximately $300 million in cash into the company. However, the announcement of the financial results led to a more than 15% drop in Trump Media's shares on Monday morning.
While Trump Media's revenue for 2023 was $4.1 million, its competitor X (formerly Twitter) reported revenue of $665 million in 2013, significantly outperforming Trump Media. X also achieved over $5 billion in revenue before being taken private by Elon Musk.
One of the key issues facing Trump Media is the decline in its main product, Truth Social. Monthly active users on iOS and Android devices dropped to 494,000 in February, marking a 51% decrease compared to the previous year. In contrast, X boasts 75 million monthly active users in the US, highlighting the significant disparity in user base between the two platforms.
Overall, Trump Media's financial challenges and user base decline underscore the uphill battle the company faces in the competitive social media landscape.
