Trump's social media venture tanks: A billion-dollar blow

2 min read | April 01, 2024 10:50 PM PDT | By Team Kalkine Media

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Trump's social media venture tanks: A billion-dollar blow — Image source: Phongphan

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Donald Trump's wealth fell by US$1 billion, mirroring the decline in the value of his social media venture - Trump Media & Technology Group Corp, following the revelation of a loss exceeding US$58 million in 2023. Revenue from the Truth Social platform was sluggish, contributing to the downturn in his net worth. Worth mentioning here is that Trump holds nearly 57% stake in the firm.

The stock of Trump Media & Technology Group Corp. declined by 21% on Monday, dropping to US$48.66 per share. This was below the level of US$49.95 per share at which the blank-check company it merged with was trading just a week ago.

Details here

In a regulatory filing, Trump Media reported a loss of US$58.2 million in 2023, contrasting with a profit of US$50.5 million in 2022.

The owner of Truth Social generated only US$4.1 million in revenue, though this was an improvement from US$1.5 million in 2022.

Furthermore, revenue plummeted by 39% YoY in the fourth quarter, dropping to around US$751,500. This decline is concerning for investors, particularly for a start-up valued at these levels.

The company's valuation now rivals that of Reddit, a social network that recently entered the public market. In 2023, Reddit disclosed sales amounting to US$804 million, alongside losses totaling US$90.8 million.

About Truth Social

In early 2022, Trump launched Truth Social, subsequent to being banned from prominent platforms such as Twitter (now X) and Facebook, following the events of the 6 January attack on the U.S. Capitol.

Although he has since been reinstated on both platforms, he has mostly refrained from using X, the platform owned by Elon Musk, which was once his primary means of communication.

Trump Media becomes a meme stock

Trump Media has entered the realm of meme stocks, following the trend of internet memes propagated on platforms like Truth Social, urging retail investors to invest in it. This places it among a handful of stocks, notably GameStop, that have caused significant disruption on Wall Street through sudden and erratic surges in recent times. However, maintaining momentum beyond the initial surge has frequently presented difficulties.

Share performance of Trump Media

Shares of Trump Media dropped by 21% on Monday. However, they have risen by nearly 200% so far this year.

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