The second-quarter revenue of Trump Media and Technology Group, the social media business owned by former President Donald Trump, dropped by 30% to $836,900 compared to the previous year.
The company, with its primary asset being the social media network Truth Social, also disclosed a loss of $16.4 million for the quarter. This represents a smaller deficit compared to the $22.8 million loss reported in the same period last year, as stated in a regulatory filing on Friday.
Trump Media, trading under the ticker DJT, has attracted a dedicated group of small investors who are fervent supporters of the former president. Many of them closely track the stock’s fluctuations on Truth Social. Despite a significant 51% decline in company shares over the past three months, Trump Media still maintains a valuation of approximately $5 billion, as reported by financial data firm FactSet.
Some analysts have drawn comparisons between the business and meme stocks due to its high valuation and volatile stock price. These analysts believe that the company’s stock is influenced more by social media buzz rather than traditional financial metrics like revenue growth and profitability.
In a Friday statement, the CEO expressed the company’s intentions to expand its offerings with a Truth+ streaming service and explore various avenues for growth, such as mergers and acquisitions.
According to the regulatory filing, the company reported that all revenue in the second quarter came from advertising on the Truth Social platform. The company attributed the 30% decrease in ad sales to a modification in revenue sharing with an undisclosed advertising partner.
“Furthermore, the company mentioned that revenue has been fluctuating due to the ongoing testing of an advertising initiative on the Truth Social platform,” it stated.
According to the regulatory filing, Trump Media claims to be a tech company that has seen significant growth since the launch of Truth Social in 2022. Similar to a financial analyst, tech startups need to understand that losses are common in the early stages. However, institutional investors usually prioritize strong revenue growth as it indicates the potential for future profitability.
As per the regulatory filing, the company anticipates incurring operating losses in the coming period as it focuses on expanding its user base and attracting additional advertisers.
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