Donald Trump's social media venture, Truth Social, faced a significant setback as it reported a staggering loss of $58 million in 2023 despite earning $4.1 million in revenue, according to filings with the Securities and Exchange Commission (SEC).

Trump Media Share Price Nosedives 20% 

The Trump Media & Technology Group, which owns Truth Social, disclosed the financial figures in its recent 8-K filing. The company's performance marks a sharp contrast from the previous year when it reported a net profit of $50.5 million with total revenue of $1.47 million.

Shares in Trump Media Technology Group plummeted following the revelation, with the company's market valuation standing at over $6.5 billion. The share price fell by more than 20%, reflecting investor concerns over the company's financial health.

The SEC filings revealed that a significant portion of the net loss, approximately $39.4 million, stemmed from interest expenses. Despite efforts to bolster revenue through advertising on Truth Social, the company's financial position remains precarious.

An auditor has raised concerns about Donald Trump's publicly traded company's ability to remain in business. NBC News reports that the filing included a letter from an independent accounting company, Colorado-based BF Borgers CPA PC, warning that Trump Media's "operating losses raise substantial doubt about its ability to continue as a going concern."

The Decline of Truth Social 

Truth Social, which trades under the ticker DJT on the Nasdaq, has been the centerpiece of Trump's foray into the social media landscape since its launch. However, its parent company's financial struggles have overshadowed the platform's performance.

Moreover, Truth Social's revenue stream appears to be drying up, with the company generating only $751,000 in the fourth quarter of 2023, down from over $1 million in the third quarter. All revenue is derived from advertising on the platform.

READ MORE: Donald Trump's Truth Social Stock Skyrockets on Its First Day of Trading on Nasdaq

Operating losses also pose a significant challenge for Trump Media & Technology Group, amounting to around $16 million for 2023. The company ended the year with just $2.7 million in cash on hand, highlighting its fragile financial position.

As disclosed in the SEC filings, Trump's association with the company may further compound its risks. The company cautioned shareholders that Trump's involvement could expose it to greater scrutiny and potential challenges.

Furthermore, Trump Media & Technology Group revealed "material weaknesses" in its internal control over financial reporting, indicating lapses in its financial management practices. Despite attempts to address these issues, the identified weaknesses persist.

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