Donald Trump passionately defended his social media platform, Truth Social, amidst a significant drop in its value following the revelation of escalating losses.
Trump Media & Technology Group, which is primarily known for its ownership of Truth Social, experienced a significant surge in its stock prices upon its debut on the stock market. With the ticker symbol “DJT”, the shares initially soared above $78 each. By the end of its first day of trading, the stock closed at $57.99, marking a 16 percent increase and resulting in a remarkable valuation of $11 billion for the company.
Shares experienced a significant drop of 21 percent on Monday, resulting in a closing price of $48.66 and causing a substantial decrease in its overall value. However, there was a slight improvement in shares as they rose to $48.81 by the time the stock market closed on Wednesday.
In a recent post on Truth Social, Trump expressed his thoughts on the competitors of the platform. He criticized the Radical Left Democrats Party, accusing them of using a “disinformation machine” to undermine the importance of TRUTH SOCIAL. According to Trump, these competitors are spreading false information and trying to convince people that TRUTH SOCIAL is not as effective in spreading the word as other platforms.
In a recent regulatory filing submitted to the Securities and Exchange Commission (SEC), it was disclosed that the company, in which Trump holds a significant stake of nearly 60 percent, generated revenue of just over $4.1 million in its last operating year. However, it also incurred substantial costs amounting to $58.2 million, resulting in an operating loss of $15.96 million.
According to BF Borgers of Colorado, an auditor for the company, the losses have raised significant concerns about its ability to continue operating.
Trump asserted that the company possessed a remarkable $200,000,000 in cash and had no debt. He further emphasized that this financial state was quite impressive for a start-up that was experiencing rapid growth.
In his continued support for Truth Social, he enthusiastically expressed, “I am incredibly impressed by the exceptional qualities of Truth Social! It boasts a remarkable financial standing, with a whopping $200,000,000 in cash and absolutely no debt. What truly matters, however, is that it serves as my primary platform to share my thoughts and opinions. Surprisingly, people are genuinely interested in hearing what I have to say, possibly even more so than any other individual in the entire world, as experts have suggested.”
In his statement, he emphasized the effectiveness of using TRUTH, noting that it played a significant role in his success as the Republican Nominee for President of the United States. He highlighted that when he endorses a politician using TRUTH, they consistently achieve victory. This highlights the reliability and efficacy of this strategy. He further emphasized his confidence in TRUTH, stating that if it didn’t work or effectively spread the message, he wouldn’t utilize it. He expressed his excitement for what lies ahead, indicating that the journey has only just begun.
Truth Social was launched in February 2022, approximately one year after Trump faced bans from X and Facebook for his posts regarding the Capitol riots. Although he has been reinstated on these platforms, Trump chooses to utilize his own platform, which currently boasts around 500,000 active users on both iOS and Android platforms.
According to Professor Todd Landman from the University of Nottingham’s School of Politics and International Relations, Truth Social will need to attract a larger user base in order to achieve success.
“The public offering of Truth Social has been highly anticipated and created a lot of excitement in the financial markets. It has the potential to significantly increase Former President Trump’s net worth. After the initial valuation, the DJT stock experienced a surge in trading activity. However, there was a subsequent decline in its value, which further intensified after the company filed its 8-K with the Security and Exchange Commission.”
According to the filing, the company reported revenue of slightly over $4 million and costs totaling $58 million. This has led many observers to categorize the company as a ‘meme stock’, with the former president holding the majority of shares.
In order to give you a clearer understanding, let’s take a look at some examples. Amazon, for instance, was established in 1994 but didn’t start making a profit until 2001. Since then, it has experienced consistent growth with impressive profit margins. Similarly, Facebook, originally known as TheFacebook, was founded in 2004, but it took a while for the company to turn a profit. It wasn’t until they expanded their user base and diversified their business model, particularly by launching their Marketplace and ad space, that they began to see financial success.
To achieve success, Truth Social (and the DJT stock) must attract a greater number of users and offer a compelling mix of content, functionality, and services.
According to Trump Media & Technology Group CEO Devin Nunes, Truth Social is in a strong financial position with no debt and over $200 million in the bank. This puts the platform in a favorable position to explore various opportunities for expansion and improvement.
Donald Trump’s representatives have been contacted by Newsweek for comment outside of regular working hours.
