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Truth Social, owned by ex-President Donald Trump, experiences a $1 billion drop in value as it reports a $58 million deficit
The stock worth of Truth Social, a company owned by previous President Donald Trump, declined more than 11% after the SEC filings showed a $58 million loss in 2023. Although it's considered a meme stock, Truth Social has been performing exceptionally well in the stock market, maintaining a $7.5 billion valuation even after the 11% decline.
Donald Trump's venture into the social media world suffered a considerable financial blow last year. His firm, Trump Media & Technology Group Corp., disclosed a loss exceeding $58 million, based on the documents unveiled on Monday.
This decline is a striking contradiction to the firm's skyrocketing stock value, even though it only produced a humble annual income of $4.1 million.
The document shared the latest news regarding the financial state of the company after its special purpose acquisition company (SPAC) transaction was finalized last week. Trump Media's shares, which have caught the interest of individual investors and are often referred to as a "meme stock," saw an 11% decline in initial trading, though the company's overall worth stayed approximately at $7.5 billion. As a result of this 11% decrease, Trump's personal assets in the company decreased by slightly more than $1 billion.
Even though Trump holds a 57 per cent majority stake, worth around $4.25 billion, he can't immediately offload his shares because of a six-month lock-up contract. This restriction makes it difficult to relieve his present financial pressure.
The documents submitted indicated a marginal rise in Trump Media's earnings from $1.47 million in 2022, despite the firm experiencing a yearly deficit. This is starkly different from the $50.5 million surplus noted in the same year, 2022, primarily due to alterations in the worth of its exchangeable securities.
Last week, Trump's media business came into existence after merging with Digital World Acquisition Corp. This merger pumped more than $275 million into the firm, offering critical financial backing. Before the merger, there were worries within Trump Media about potential insolvency.
At present, Trump is dealing with legal issues, including four criminal cases. The initial trial, set to begin on April 15, accuses him of altering business documents to hide payments made to an adult film actress prior to the 2016 election. Moreover, he was fined $454 million when the New York attorney general effectively proved that he had overstated his net worth via bank transactions.
(Incorporating information from various sources)
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