- Trump Media shares plummeted as much as 22% on Monday morning after posting strong gains in their first week.
- A new SEC filing showed the company reported a net loss of $58.2 million last year, on just $4.1 million of revenue.
- The company says negative cash flows and operating losses should be expected as it works on expanding on the user base.
Trump Media shares nosedived as much as 22% on Monday morning amid fresh worries about its parent company's financial obligations.
In a new SEC filing, Trump Media reported a net loss of $58 million for 2023, and just $4 million in revenue.
"As of December 31, 2023 and 2022, management had substantial doubt that TMTG will have sufficient funds to meet its liabilities as they fall due, including liabilities related to promissory notes previously issued by TMTG," the company said.
As the platform is working on bringing more users, advertisers, and partners, TMTG said the company expects to "continue to incur operating losses and negative cash flows from operating activities for the foreseeable future."
On top of that, the ex-president's company admitted to "material weakness" in its financial reporting controls for the first three quarters of 2023, which persist to date.
The decline comes after Trump Media stock soared 67% last week after it started trading under the ticker DJT on the Nasdaq. The initial stock pop boosted the net worth of Donald Trump — who owns 58% of the company — to nearly $7 billion.
The latest financial figures have sparked investor concerns that the company is essentially generating nothing, with its appeal confined to Trump enthusiasts, and it's not poised to rival the likes of Nvidia anytime soon.
The filings also disclosed that the company might be subject to "greater risks" than typical social media platforms because of the former president's involvement.