Shares of Trump Media & Technology Group dropped nearly 18% following the company’s disclosure of going-concern doubts due to challenges meeting financial obligations shortly after its initial public offering through a blank-check merger. Trump Media reported a net loss of $58.2 million in 2023, a significant decline from the previous year’s net profit of $50.5 million. Revenue for the company increased to $4.13 million in 2023 from $1.47 million in 2022, according to regulatory filings. The company expressed concerns about having sufficient funds to meet its liabilities, including those related to promissory notes.
Trump Media anticipates ongoing operating losses and negative cash flows as it focuses on expanding its user base, attracting more platform partners, and securing advertisers. Although its shares initially surged more than 16% on its first day of trading, there has been volatility in the stock price since then, with declines seen recently. In addition to financial challenges, Trump Media is also embroiled in a legal dispute with co-founders Wesley Moss and Andrew Litinsky over ownership stakes. The co-founders are seeking an 8.6% stake in the company, while Trump Media is looking to nullify their ownership claims.
A Delaware judge has requested Trump Media and the co-founders to schedule a hearing this month to address the ownership dispute. The co-founders accuse Trump Media of attempting to dilute their stake in the company, while Trump Media asserts that they have not met the requirements to receive shares and is seeking to remove their ownership rights. The legal battle between the parties has spilled over into both Delaware and Florida state courts, adding complexity to the company’s challenges. The outcome of the dispute could have significant implications for the future direction of Trump Media and its leadership structure.
Investors and analysts will be closely monitoring the developments surrounding Trump Media as it navigates financial uncertainties and legal disputes. The company’s ability to address its financial obligations and resolve conflicts with key stakeholders will be critical to its long-term success and sustainability. Trump Media’s performance in the coming months will be closely scrutinized to assess its ability to overcome the current challenges and drive growth in an increasingly competitive digital media landscape. The company’s strategic initiatives and decisions in response to these obstacles will be pivotal in determining its future trajectory and market position.
