Shares in Trump Media & Technology Group, owned by Truth Social, fell more than 20 percent on Monday.
of the United States of the former president Donald Trump the social media company's stock plunged more than 20 percent on Monday after the company reported losses of millions.
On Easter Monday, Trump Media & Technology Group published its first earnings report as a listed company. The company owns the social service Truth Social.
The company said that last year it made a net loss of 58.2 million US dollars, while in 2022 the net loss remained at 50.5 million dollars.
The company warned that it may have trouble repaying its maturing debts. It also said that it expects its operating profit to remain in the red and its cash flow to be in the red for the foreseeable future.
The information released on Monday sent Trump Media stock plummeting. The stock fell 21 percent to $48.66. Last week's rise of the share was lost in the price drop.
Trump Media listed on the Nasdaq stock exchange in New York last week by merging with the listed shell company Digital World Aqcuisition. On March 26, the stock closed its first day of trading at nearly $58.
“Truth Social was overvalued, and that's pushing the stock down. Since the service does not have a clear path to profitability and its income is meager, the stock will not last,” says an Insider Intelligence analyst Ross Benes news agency Reuters.
Despite the drop in the stock, Trump Media's market value is still over six billion dollars. The market value of Reddit, which is clearly larger in terms of turnover and number of users, is eight billion dollars.
“Trump Media enjoyed huge hype, but the company is far from becoming a real challenger to X, Instagram, Tiktok or other social platforms,” says an analyst at Running Point Capital Michael Ashley Schulman.
Last year, Trump Media's turnover increased to 4.1 million dollars from 1.5 million dollars the other year. Reddit's turnover reached 800 million dollars last year.
In the fourth quarter of last year, Trump Media's turnover fell below less than a million dollars. It was about a quarter less than in the previous quarter, the economic newspaper Financial Times tells.
Reddit has 73 million active users. Truth Social does not disclose the number of its active users, but only says that a total of 8.9 million accounts have been created for the service.
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