Shares of Truth Social owner Trump Media & Technology Group plunged Monday after the company disclosed that it lost more than $58 million and generated very little revenue in 2023. The figures underscore why some experts warn Trump Media's multibillion-dollar valuation defies logic and is reminiscent of the meme stock craze. In a regulatory filing on Monday, Trump Media said it lost $58.2 million in 2023, compared with a profit of $50.5 million in 2022. The Truth Social owner generated just $4.1 million in revenue, although that was up from $1.5 million in 2022. Not only that, but revenue tumbled 39% year-over-year in the fourth quarter to just $751,500. That's not what investors want to see from any start-up, especially one valued at these levels. Shares of Trump Media tumbled 24% Monday afternoon following the new filings, though they are still up nearly 200% so far this year. The losses are so severe that Trump Media's accountants warned they "raise substantial doubt about its ability to continue as a going concern," which is Wall Street for: We may not be able to stay in business. That warning echoes one made in November when accountants said Trump Media might not survive unless it soon completes its merger to go public. That long-delayed deal was completed last week, paving the way for Trump Media to receive an influx of approximately $300 million in cash. The company can now use those funds to pay down debt and, importantly, build out its infrastructure. "I believe the $300 million of cash should remove this 'going concern' risk," said Matthew Kennedy, senior IPO strategist at Renaissance Capital. Even though Trump Media is losing money and generating scant revenue, Wall Street has valued the company by as much as $11 billion based on the stock's closing price Friday, according to Renaissance Capital. While Trump Media made just $4.1 million in revenue in 2023, rival X (formerly known as Twitter) raked in more than 100 times that much — $665 million — in 2013, ahead of its initial public offering in November 2013. Twitter also generated just over $5 billion in revenue in the final year before it was taken private by Elon Musk. The problem for Trump Media is its main product — Truth Social — is shrinking. Monthly active US users on iOS and Android plunged in February to 494,000, down 51% year-over-year, according to Similarweb. By comparison, X has 75 million monthly active US users. Even Threads has more than 10 times as many users as Truth Social, according to Similarweb. "2024 is the make-or-break year for this company," said Kennedy. "For TMTG the thing that matters now is getting in front of the cash cannon that is the 2024 presidential election. "And the company does have one notable advantage. Trump-backed super PACs have raised millions. Where do you think they'll spend their digital ad buckets?" — CNN
