The owner of former President Donald Trump's social networking site, Truth Social, reported a loss of over $300 million in the last quarter, as revealed in its first earnings report as a publicly traded company.
During the three-month period that concluded on March 31, Trump Media and Technology Group reported a loss of $327.6 million.
Trump Media Lost Over $300 Million in First Quarter
Accoding to AP News, this loss was primarily attributed to $311 million in non-cash expenses associated with its merger with Digital World Acquisition Corp.
The merger involved a company that was actively seeking a suitable partner for consolidation. This is an illustration of a special purpose acquisition company, or SPAC, which provides young companies with faster and more convenient ways to have their shares traded publicly.
In the previous year, Trump Media recorded a loss of $210,300. The revenue collected by Trump Media in the first quarter amounted to $770,500, primarily driven by its new advertising initiative. The amount decreased from $1.1 million compared to the previous year.
On the other hand, there was a net loss of $327.6 million during the first three months of the year, which is higher than the loss of $210,300 recorded a year ago.
According to a press release, CEO Devin Nunes attributed $311 million in non-cash expenses to "merger-related expenses" associated with Digital World Acquisition Corp. earlier this year.
Trump Media assured investors that it had enough working capital to sustain its operations in the coming months. The company disclosed that it had $273.7 million in cash and cash equivalents by the end of the quarter.
Trump Media Remains Optimistic
The company stated that it is currently in the early stages of development and is primarily focused on long-term product development. This includes the launch of a live streaming platform through Truth Social, with a greater emphasis on long-term goals rather than quarterly revenue.
Dunes emphasized that the company has strong financial backing and a dedicated group of retail shareholders who are committed to their mission of establishing a platform for free speech in the face of Big Tech censorship.
In a recent development, Trump Media's former auditor, BF Borgers, has been charged by the Securities and Exchange Commission with "massive fraud." As a result, the quarterly filing has now been made public.
The accounting firm was dismissed by Trump Media on May 3, and federal regulators were notified last week that the shakeup would cause a delay in the filing of its quarterly earnings report.
As the market came to a close on Monday, DJT's share price stood at $48.38. During after-hours trading, it increased by 36 cents to $48.74, although it remains considerably lower than its initial peak of nearly $80, as per Daily Beast.
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