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Trump Media & Technology Group stock fell 7% Monday after revealing another quarterly loss that continued to cast doubt on the firm’s ability to turn a profit.
The company behind Former President Donald Trump’s social media platform Truth Social reported a net loss of $16.4 million in the second quarter on Friday. About half of the loss, or $8.3 million, stemmed from legal costs tied to its merger with Digital World Acquisition Corp. (DWAC), a special purpose acquisition company, or SPAC.
Revenue fell to $836,900 from $1.19 million a year earlier — a 30% hit. Trump Media attributed the decrease to “a change in the revenue share with one of our advertising partners” and its testing of “a nascent advertising initiative” on Truth Social.
It faced a series of “significant costs,” including $602,000 for accounting fees that included the cost of re-auditing the company’s fiscal year 2022 and 2023 results after the previous auditor was permanently barred by the Securities and Exchange Commission.
Trump Media shares traded at $24.38 on Monday afternoon, bringing the company’s market capitalization to $4.63 billion. Despite the high valuation, the company has consistently bled money. In May, it reported a loss before income taxes of $327.6 million for the first quarter and just $770,500 in revenue.
As of Aug. 9, the former president holds 59.9% of the outstanding shares of the company’s common stock, making him a majority shareholder. Rather than pursuing a traditional initial public offering, Trump Media went public by merging with DWAC in March following years of delays.
Devin Nunes, the company’s chief executive officer, touted the company’s accomplishments in a release Friday, including the launch of its live TV streaming platform, Truth+, which it began rolling out earlier this month. The streaming platform will initially include news, commentary, weather, lifestyle, and entertainment channels. The company has said it will have full control over its tech delivery stack for streaming across a private network content delivery network.
“From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing,” Nunes said.
In addition to building out Truth+, Nunes said the company is also exploring “numerous other possibilities for growth, including mergers and acquisitions.” Trump Media had $344 million in cash and cash equivalents with no debt as of June 30, the company said in a regulatory filing.
“With its strong balance sheet and zero debt load, the Company believes it has sufficient working capital to fund operations for the foreseeable future,” the company said.