Trump Media Reports Staggering Loss Of $58.2 Million In 2023 Amid Concerns Over Financial Viability

Shares of Truth Social owner Trump Media & Technology Group witnessed a significant decline reporting a staggering loss of $58.2 million in 2023.

The Truth Social app is being displayed on a smartphone with Truth Social visible in the background in this photo illustration in Brussels, Belgium, on March 27, 2024.

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Shares of Truth Social owner Trump Media & Technology Group witnessed a significant decline on Monday following the revelation of substantial financial losses in 2023, according to regulatory filings. Trump Media reported a staggering loss of $58.2 million in 2023, a sharp contrast from the profit of $50.5 million in the previous year, CNN reported.

The company's revenue amounted to just $4.1 million logging an increase from $1.5 million in 2022. However, revenue plummeted by 39% year-over-year in the fourth quarter, raising concerns among investors about the company's financial stability, CNN's report stated.

The extent of Trump Media's losses has prompted its accountants to issue a warning regarding its ability to continue operating. The accountants cautioned that the losses "raise substantial doubt about its ability to continue as a going concern," echoing concerns previously raised in November, the report mentioned. Despite completing a long-delayed merger last week, Trump Media still faces challenges in maintaining its financial viability.

Shares Of Trump Media Plummet By 24%

Following the disclosure of financial figures, shares of Trump Media plummeted by 24% on Monday afternoon, although they remain significantly higher compared to the beginning of the year, as per the report. Analysts suggest that the completion of the merger, which provided the company with approximately $300 million in cash, could mitigate the risk of financial instability.

According to CNN, Matthew Kennedy, senior IPO strategist at Renaissance Capital, stated, "I believe the $300 million of cash should remove this 'going concern' risk." However, the company's main product, Truth Social, faces challenges as monthly active users on iOS and Android platforms experienced a significant decline in February.

Analysts assert that 2024 will be a crucial year for Trump Media, particularly in leveraging the presidential election for its digital advertising efforts. Despite facing financial hurdles and a shrinking user base, the company aims to capitalise on its association with Trump-backed super PACs, which have raised substantial funds for digital advertising.

Kennedy remarked, "For TMTG, the thing that matters now is getting in front of the cash cannon that is the 2024 presidential election", as quoted by the report.