Former President Trump argued Thursday that Truth Social is “very solid,” after the platform’s parent company reported a $58 million loss last year and saw its shares plunge more than 20 percent this week.
“All of the competitors to TRUTH SOCIAL, especially those in the Radical Left Democrats Party who are failing at every level, like to use their vaunted ‘disinformation machine’ to try and convince people, and it is not easy to do, that TRUTH is not such a big deal and doesn’t ‘get the word out’ as well as various others, which they know to be false,” Trump said in a post on the website.
Truth Social’s parent company, Trump Media & Technology Group, went public last week, after finalizing its merger with the blank check company Digital World Acquisition Corp. (DWAC) after more than two years of delays.
Trump Media had a strong stock market debut, with shares rising above $79 on its first day of trading and settling around $62 by the end of the week.
However, the company’s share price plummeted Monday, after it reported a $58 million loss for 2023. By market close Monday, Trump Media’s stock had fallen 21.4 percent to a price of $48.66 per share. As of Thursday morning, its shares were hovering around $47.
Trump claimed Thursday morning that Truth Social had more than $200 million in cash and “ZERO DEBT.” Financial information on the company’s first quarter performance is not yet available.
Trump Media received an influx of $300 million from its merger with the DWAC. According to its regulatory filings, the company generated about $4.1 million in revenue last year and spent roughly $16 million on operating expenses and $39.4 million on interest expenses.
“More importantly, it is the primary way I get the word out and, for better or worse, people want to hear what I have to say, perhaps, according to experts, more than anyone else in the World,” Trump said.
The Truth Social parent company said in Monday’s filings that it “expects to continue to incur operating losses and negative cash flows from operating activities for the foreseeable future, as it works to expand its user base, attracting more platform partners and advertisers.”
It also noted that “it is premature for [Trump Media] to predict when it will attain profitability and positive cash flows from its operations.”
Given the company’s weak fundamentals, many financial experts have categorized Trump Media as a “meme stock,” with enthusiasm for the former president driving the stock price higher than would otherwise be expected.
Trump owns roughly 58 percent of Trump Media, which was worth about $3.6 billion based on the company’s stock price Thursday morning.
However, the former president argued that Truth Social is “very good for a startup” and is “growing fast.”
“Look, using TRUTH, I became the Republican Nominee for President of the United States, and in record time! When I ENDORSE a politician on TRUTH, they almost ALWAYS WIN. If it didn’t work, or properly get the word out, I wouldn’t use it – But it does work, and work really well – And the fun is just getting started!!!” he said.