Trump’s Truth Social Stock Takes A Dive Shortly After IPO Debut

The recent surge in stock value has been fueled by individual investors, some of whom are expressing solidarity with the former president amidst his mounting legal challenges and associated expenses.

With nearly a 60% ownership stake in the company, Mr. Trump stands to gain a significant windfall of around a billion dollars when he eventually sells his shares. However, he is legally prohibited from doing so for the next six months unless granted a waiver by the company’s board.

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Despite this investor enthusiasm, Trump Media revealed in a special filing to the Securities and Exchange Commission (SEC) that it anticipates ongoing operational losses and negative cash flows in the foreseeable future.

According to the financial filing, the company incurred approximately $40 million in interest expenses and $16 million in operating losses in 2023. Management expressed “substantial doubt” regarding the company’s ability to meet its financial obligations as they become due.

Truth Social was launched in February 2022, approximately a year after the former president was banned from Twitter (now X) and Facebook following the violent riot at the US Capitol.

Although Mr. Trump’s accounts on Twitter and Facebook have been restored, he persists in utilizing Truth Social as his primary platform for social media engagement.

However, despite his involvement, the platform has struggled to attract a large audience. According to estimates from Similarweb, Truth Social boasts approximately five million active monthly users, significantly fewer than its competitors.

While Truth Social asserts it has garnered around 8.9 million sign-ups, it has refrained from disclosing key performance metrics typically shared by companies, which could provide shareholders with a more comprehensive understanding of its operations.

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