Experts Dub Trump a ‘Money Incinerator’ After Looking at Dismal State of Truth Social Finances

Several finance experts were taken aback by former president Donald Trump's latest financial disclosures and took to social media to discuss it. Truth Social's parent company, Trump Media & Technology Group, disclosed updated financial information on April 1, indicating that the business lost $58 million in the previous year while only reporting $4 million in revenue. The company's stock price spiked last week, giving it a market valuation of almost $7 billion at the closing of trade, but the fresh figures prompted questions, according to Raw Story.

Commentator and progressive writer Judd Legum, on X, explained why this was happening. He ascribed the company's share prices to Trump loyalists who are making investments in the business to show their support for the ex-president. However, considering that Trump's social media business is 'basically a money incinerator,' he cautioned that they would eventually come to regret their financial choice.

Meanwhile, writer Bill Grueskin weighed the company's appalling financial figures and then juxtaposed them with its multibillion-dollar market capitalization, sarcastically stating, "This isn't an April 1 joke." Truth Social's core financials, according to tech reporter Drew Harwell of the Washington Post, are "way out of sync with the frenzied stock-market debut that just valued it at $8 billion," adding that the company's shares were "crashing on the news."

Trump Media & Technology Group has had a sharp decline in its stock price following its announcement that it lost over $58 million and saw virtually little income in 2023. As the company's largest shareholder, Trump saw a more than $1 billion decline in his net worth in a single day, reported CNN. The multibillion-dollar valuation of Trump Media, according to several analysts, defies reason and is similar to the meme stock frenzy.

Moreover, the new information, according to options trader Nick Yoder, would only validate investor concerns that Truth Social's share price is in a bubble that would ultimately burst. Last week, Yoder remarked that there was an unprecedented demand for short-selling the company's shares. "Why is there an unprecedented level of interest in shorting DJT (Truth Social stock)?" he asked. "One apparent reason: This '$13 Billion' company has less revenue than the small lumber yard next to my parent’s house. Currently trading at a Market Cap/ Revenue ratio of around 1,500x (many companies have a multiple of 1x)," he asserted.

Taking a more comprehensive stance, NPR media analyst Eric Deggens contended that Truth Social's absurdly high share price represented a critique of American capitalism in general. "News that Trump's Truth Social lost $58 million last year just highlights a central, terrible truth about the stock market: Companies hold value because a bunch of people are willing to buy their stock- not because they are actually good businesses," he wrote.