Connect with us

Hi, what are you looking for?

The Freedom RightThe Freedom Right

Stock

Trump Media auditor warns that losses threaten the company’s ability to stay in business

An auditor has raised doubts about the ability of former President Donald Trump’s publicly traded company to stay in business, according to a new regulatory filing.

Trump Media and Technology Group, which operates the Truth Social platform, reported it lost $58.2 million in 2023 while generating total revenues of $4.1 million, according to the Monday filing with the Securities and Exchange Commission. Trump Media listed its largest expense for the year as interest payments totaling more than $39 million.

The filing includes a note from an independent accounting firm, Colorado-based BF Borgers CPA PC, warning that Trump Media’s ‘operating losses raise substantial doubt about its ability to continue as a going concern.’ The firm has worked with Trump Media since 2022.

The note is dated March 25, the day before Trump’s company started trading on the Nasdaq stock exchange under the symbol DJT, surging at first and earning comparisons to so-called meme stocks.

Shares of the company fell more than 21% to $48.66 on Monday. Its market value stood at more than $6.5 billion.

A spokesperson for Trump Media referred a request for comment to a Monday news release that quotes Trump Media CEO and former U.S. Rep. Devin Nunes.

“Closing out the 2023 financials related to the merger, Truth Social today has no debt and over $200 million in the bank, opening numerous possibilities for expanding and enhancing our platform,’ Nunes said in the release. ‘We intend to take full advantage of these opportunities to make Truth Social the quintessential free-speech platform for the American people.”

In the filing, the company acknowledged that it expects to operate at a loss for the ‘foreseeable future’ as it works to expand Truth Social’s user base and attract more advertisers. It said it would be ‘premature’ to predict when it will attain profitability and positive cash flows from its operations. It said it would need bridge funding of between $5 million and $60 million.

As of the end of 2023, Trump Media had about $2.6 million in cash on hand and total liabilities of $70.1 million, according to the filing. The company received an infusion of about $300 million from its merger a week ago with shell company Digital World Acquisition Corp.

Trump Media went public last week and gave the former president a paper net worth of around $7 billion. However, Trump is barred from selling the shares he owns in the company for six months. Even before the latest losses were revealed, analysts said the value of the company would plummet if Trump were to sell his shares.

“If he goes ahead [with selling], it could sink DJT by at least 15% to 40% based on option pricing,” said Ben Emons, senior portfolio manager and head of fixed income at NewEdge Wealth, in a research note.

Analysts also expect trading in the stock to be volatile while the legal and political fortunes of the former president shift as he seeks a new term in the White House. John Rekenthaler, vice president for research at Morningstar financial services group, likened the company’s stock to a cryptocurrency.

‘As with bitcoin, people buy Trump Media not for future cash flows but because: 1) they expect its price to rise, and 2) they feel an affiliation for the asset,’ Rekenthaler wrote. ‘Bitcoin owners are members of a club. So, too, are Trump Media investors, to an even greater degree. For them, DJT shares represent a currency by which they can express their beliefs and commitment.’

This post appeared first on NBC NEWS

Enter Your Information Below To Receive Latest News, And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Investing

    Vermont Sen. Bernie Sanders, 81, defended President Biden, 80, against voter critiques that he lacks the energy and vigor to continue leading the United...

    Investing

    Political advisers to both President Biden and Vice President Harris were reportedly annoyed with Democrat California Gov. Gavin Newsom over a planned debate with...

    Editor's Pick

    By the IoT Analytics team. A new report from IoT Analytics highlights eight notable trends helping to advance and promote digital twins. Four of...

    Stock

    A second delivery driver has died in Texas amid record-high temperatures, just as the regulation of workplace heat safety enters a new legal limbo...

    Disclaimer: thefreedomright.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2020-2024 The Freedom Right. All Rights Reserved