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Shares of Trump Media & Technology Group fell nearly 18% on Monday as the parent of Truth Social platform raised going-concern doubts due to struggles to meet its financial liabilities just days after going public through a blank-check merger.
The company posted a net loss of $58.2 million in the year ended December 2023, compared with a net profit of $50.5 million a year earlier. Revenue was $4.13 million last year, up from $1.47 million in 2022, it said in a filing.
“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.
Trump Media said it expects to incur operating losses and negative cash flows from operations for the foreseeable future, as it works to expand its user base, attracting more platform partners and advertisers.
Its shares gained more than 16% on its first trading day on March 26, as retail investors including supporters of former President Donald Trump piled into the stock.
But the stock has since then seen choppy trading, falling for the second straight session on Monday.
Separately on Monday, a Delaware judge said he wanted the company and Trump Media co-founders Wesley Moss and Andrew Litinsky to set a date this month for a hearing to determine if the pair should receive the 8.6% stake in the company they claim they are owed.
Trump Media and the pair have sued each other in Delaware and Florida state courts.
The co-founders accused Trump Media of trying to improperly dilute their stake. The company said they had failed to earn their shares and that it was seeking to strip them of their ownership and wanted a judge to declare they had no right to appoint two board members.
