Thu. Apr 25th, 2024

Trump Media auditor warns losses raise doubt about company

By 37ci3 Apr1,2024

An auditor has raised doubts about the ability of Donald Trump’s publicly traded company to stay in business. new regulatory filing.

Trump Media and Technology GroupTruth Social, which operates the platform, reported a loss of $58.2 million in 2023 on total revenue of $4.1 million, according to a filing with the Securities and Exchange Commission on Monday. Trump Media listed its biggest expense of the year as more than $39 million in interest payments.

The filing included a warning from Colorado-based independent accounting firm BF Borgers CPA PC that Trump Media’s “operating losses cast serious doubt on its ability to continue as a going concern.” The company has been working with Trump Media since 2022.

The note is from March 25, the day before Trump’s company It started trading on Nasdaq The stock exchange under the symbol DJT is initially bullish and earns a so-called comparison “meme resources.”

The company’s shares fell more than 20% on Monday. Its market value was more than 6 billion dollars.

A spokesperson for Trump Media did not immediately respond to a request for comment.

In the filing, the company acknowledged that it expects to operate at a loss for “the foreseeable future” as it works to expand Truth Social’s user base and attract more advertisers. He said it would be “premature” to predict when his operations would achieve profitability and positive cash flow. He said he would need $5 million to $60 million in bridge financing.

Trump Media went public last week and gave the former president nearly $7 billion worth of paper money. However, Trump is prohibited from selling his shares in the company for 6 months. Even before the latest losses were announced, analysts said the company’s value would drop if Trump were to sell his shares.

“If he goes ahead [with selling]it could sink DJT by at least 15% to 40% based on option pricing,” said Ben Emons, senior portfolio manager and head of fixed income at NewEdge Wealth, in a research note.

Analysts also expect volatile stock trading as the former president’s legal and political fortunes shift as he seeks a new term in the White House. John Rekenthaler, vice president of research at Morningstar Financial Services Group, likened the company’s shares to cryptocurrency.

“As with bitcoin, people are buying Trump Media not for future cash flow, but because they: 1) expect its price to go up and 2) feel a sense of belonging to the asset,” Rekenthaler wrote. “Bitcoin owners are members of a club. So, to a greater extent, are Trump Media investors. For them, DJT stock represents a currency in which they can express their beliefs and commitments.”

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By 37ci3

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