The nosediving share price of the company — which uses the stock ticker DJT, for Trump’s initials — shaved hundreds of millions of dollars off both the company’s market value and Trump’s wealth, given that he owns about 57 percent of the firm.
The new financial figures throw into stark relief the gap between Trump Media’s highly hyped investor-driven valuation on the public stock market and the reality of its business performance.
The company said in a filing that its management had “substantial doubt” it would have enough money to pay its debts as they come due, including those from promissory notes the company had previously issued.
Trump Media said it paid nearly $40 million in interest expenses last year and racked up about $16 million in operating losses.
Trump Media, which makes money exclusively through advertising on Truth Social, has struggled to gain a broad audience after two years of operation. Truth Social’s website peaked last month at 277,000 U.S. visitors Tuesday, the first day of its public trading, according to estimates from the online analytics firm SimilarWeb. On the same day, Reddit saw more than 32 million U.S. visitors.
Reddit, the discussion-board service that recently went public and whose shares are trading at lower prices than Trump Media, made more than $800 million in revenue last year, or more than 200 times Trump Media’s 2023 revenue.
Trump, who invested no money in the company, owns a stake in the company worth about $4 billion. SEC filings last week said Trump was given 78 million shares of the company and stood to earn millions more over the next three years if the stock stayed above $12 to $17.
Trump can’t sell the shares for six months due to a provision in the company’s merger agreement, known as a lockup, unless the company’s board approves it. Cashing out early, however, could sink the stock price by flooding the market with shares and undermining investor confidence in Trump’s commitment to the brand, financial analysts said.
The board includes Trump’s son Donald Trump Jr.; Robert E. Lighthizer, Trump’s former trade representative; Linda McMahon, his former administrator of the Small Business Administration; and Kash Patel, who served on Trump’s National Security Council.
Trump Media’s chief executive, the former Republican congressman Devin Nunes, was given 115,000 shares, a stake worth about $6.9 million today. He and other board members are bound by the same lockup agreement.
Nunes is paid a $750,000 salary that is subject to increase to $1 million within two years. The company’s two chief financial officers, Phillip Juhan and Andrew Northwall, are each paid about $350,000. Nunes, Juhan and Northwall will also each receive $600,000 “retention bonuses” this month.
Patel was paid $130,000 last year through a consulting agreement. Dan Scavino Jr., Trump’s White House social media director, was also paid $240,000 last year through a consulting agreement that listed him as an independent contractor, the filing shows. He, too, will be given a $600,000 retention bonus.
The filing shows that Digital World Acquisition, the special purpose acquisition company that merged with Trump Media to take it public, paid $18 million to the SEC as part of a settlement last week.
Trump Media said in a filing that it aimed to spend some of the money it unlocked in the merger toward “strategic investments” in marketing, advertising sales and other technology.
The company also said it has begun testing a “state-of-the-art technology that supports video streaming and provides a ‘home’ for canceled content creators,” which it “aims to acquire and incorporate into its product offerings and/or services as soon as practicable.”
Trump Media said it “expects to continue to incur operating losses and negative cash flows” as it works to expand its user base but that it expects its growth will come from Truth Social’s “overall appeal.”
The company has declined to share the performance metrics common in the tech industry — such as active users and ad prices — by saying that focusing on those numbers “might not align with the best interests” of Trump Media or its shareholders.
This is a developing story. Please check back for updates.
