Donald Trump’s social media company releases financials – shares plummet

On Monday, Truth Social, the social media platform owned by Trump Media & Technology Group, published its first earnings report since going public. The company reported a net loss of $50.5 million in 2022 and a net loss of $58.2 million in the previous year. This news caused the stock price to drop by 21% to $48.66, erasing gains made in the previous week. Despite this decline, Trump Media’s market value remains over six billion dollars.

However, analysts believe that the company may not pose a real challenge to larger social media platforms like X, Instagram, or Tiktok. In terms of revenue last year, Trump Media generated $4.1 million compared to Reddit’s $800 million. Additionally, in the fourth quarter of last year, Trump Media’s revenue dropped to less than a million dollars, indicating a significant decline from the previous quarter.

While Reddit boasts 73 million active users, Truth Social has not disclosed its number of active users, only stating that 8.9 million accounts have been created on the platform. The future of Truth Social and Trump Media remains uncertain due to their financial struggles and lack of clear path to profitability. Analysts believe that the high valuation of Truth Social contributed to its sharp decline and it may face challenges in competing with established social media giants.

In summary, despite declining profits and lack of profitability for Trump Media & Technology Group’s Truth Social platform, analysts believe it may not pose a significant threat to larger social media companies such as X or Instagram due to its low user base and revenue compared to other platforms like Reddit. The future prospects for both companies remain unclear as they continue to struggle financially and compete against established players in the industry.

By Sophia Gonzalez

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