US President Joe Biden and former president Donald Trump dominated their respective primary contests in the US election.
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Donald Trump has suffered a US$2 billion ($3.3b) blow to his wealth after shares in his company Truth Social plunged by almost a quarter.
Trump Media & Technology Group (TMTG) - the parent company of Trump’s social media platform - saw its stock tumble after revealing it lostUS$58 million ($97m) last year on revenues of just US$4.1m ($6.9m). That compares to a market value of US$6.3b (10.6b).
The company also warned of a “substantial doubt that TMTG will have sufficient funds to meet its liabilities as they fall due”.
The financial disclosures sparked a sell-off that saw shares in TMTG drop by around 24 per cent.
It comes only a week after the company began trading on the Nasdaq following a merger with a listed cash shell. Shares soared by more than 50pc after the deal completed and TMTG began trading under the ticker DJT.
Truth Social had published only limited details about its financial performance in 2023 ahead of the completion of the merger.
When TMTG debuted, the share price surge had propelled Trump into the ranks of the world’s 500 richest people thanks to his 57.3 per cent stake in the company.
However, the collapse in the company’s share price reduced the value of his position in TMTG from around US$5.5b ($9.2b) last week to about US$3.5b ($5.9bn) as of Monday.
Trump is unable to sell any shares in the company for six months under the terms of the listing agreement.
Trump has suffered a $3.3b blow to his wealth. Photo / AP
The value of his stake has been seen as a key financial lifeline. Trump is facing mounting legal and financial difficulties, including a criminal trial over so-called “hush money” payments to a porn star, Stormy Daniels, ahead of the 2016 election. He was handed a US$454m ($763m) fine for fraudulently inflating his net worth, although that penalty was later reduced.
Truth Social was founded by Trump in 2021 after the former president was banned from Twitter (now X) in the wake of the January 6 attack on the Capitol by his supporters. His account was reinstated following Elon Musk’s US$44bn ($74b) takeover of Twitter in 2022, but he has only posted on it once since.
Truth Social styles itself as an alternative to Twitter and other platforms like Facebook but with less moderation, describing itself as a “big tent” platform with a focus on free speech. Trump is a frequent user, often posting multiple times a day.
In a filing on Monday, TMTG’s management said “adhering to traditional key performance indicators, such as sign-ups, average revenue per user, ad impressions and pricing, or active user accounts including monthly and daily active users, could potentially divert its focus” away from growth.
TMTG’s merger with the special acquisition vehicle Digital World Acquisition Group netted the social media platform a cash injection of almost US$300m ($504m). It came after TMTG had warned of possible bankruptcy without a deal.
While Trump is not currently a director of the company, his son Donald Trump Jr sits on its board.
