Shares of Trump Media & Technology Group suffered a significant drop, falling 8.6% to close at $44.19, after the company reported a substantial net loss of $327.6 million for the first quarter of 2024, far overshadowing its modest revenue of just $770,500. The company, with former President Donald Trump as its majority shareholder, has been trading publicly under the ticker DJT following its March debut through a merger with a shell company.
The financial results disclosed that the loss equated to $3.61 per share attributable to common stockholders. This loss was primarily due to noncash expenses, such as “the conversion of promissory notes, and the associated elimination of prior liabilities,” which were remnants from its merger with Digital World Acquisition Corp.
Trump Media pointed out that the majority of its limited revenue stemmed from its fledgling advertising initiative, indicating the company is still very much in its infancy concerning monetization.
Despite the earnings report’s focus on long-term product development over quarterly revenue, the immediate market reaction was one of concern, reflecting the company’s ongoing operational challenges.
Trump Media acknowledged its historical pattern of operating losses and negative cash flows from operating activities and projected this trend to continue “for the foreseeable future” as it aims to expand its user base and attract additional platform partners and advertisers.
Before the announcement of the financial losses, the company’s shares had experienced volatility since its public listing.
They reached a high of over $79 per share, subsequently dropping in the following weeks but had partially rebounded to around $44 prior to the earnings report. This fluctuation in share price has occurred despite the company’s limited revenue generation and continued high market capitalization of approximately $6 billion.
Relevant articles:
– Trump Media stock falls 10% after posting $327.6 million loss in first quarter, nbcnews.com, 05/22/2024
– Trump Media stock closes down 8.6% after posting $327.6 million loss in first quarter, CNBC, 05/21/2024
– Donald Trump Stock Falls; Trump Media Reports Big Loss, Scant Revenue, Investor’s Business Daily, 05/21/2024
– Trump’s Net Worth Drops $400 Million After Media Company Reports Millions In Losses, Forbes, 05/21/2024
– Trump Media stock closes down 8.6% after posting $327.6 million loss in first quarter, NBC Chicago, 05/21/2024
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