Things were looking good for Truth Social (NASDAQ:DJT), riding a wave of success from the merger of Trump Media and Digital World Acquisition Corp. But today, the newly-combined juggernaut was holed below the waterline and sank rapidly, dropping nearly a quarter of its market cap in Monday afternoon’s trading. That’s thanks largely to a report of net losses in 2023, and just how deep they were.
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Calling it a “sea of red ink” might actually be insulting to the concept of a “sea.” This is more like an entire ocean planet’s worth of red ink. It turns out that Truth Social brought in $4.1 million in 2023. Not particularly great, but not particularly bad, either. However, when Truth Social revealed that it turned in a net loss of $58.2 million, that’s when things got particularly bad. Much of that loss, however, traces back to an interest expense.
Thus, while the number sounds like a catastrophe, the whole story proves a bit less bleak. Indeed, even with the massive loss, Truth Social’s market cap is still measured in multiple billions of dollars.
Bigger Trouble Afoot?
An auditor—BF Borgers CPA PC—recently sounded a rather distressing alarm about the operation, noting that Truth Social’s “…operating losses raise substantial doubt about its ability to continue as a going concern.” Given that Borgers has only worked with Truth Social since 2022, it might be a bit premature to sound such a dire alarm, but sounded it was. Meanwhile, there are already signs that Truth Social is preparing to pivot. Trump himself has been seen selling everything from branded sneakers to Bibles, so the idea that Truth Social in turn would be preparing something else that would hopefully wipe out its losses isn’t out of line.
Is DJT a Good Buy?
Turning to Wall Street, a look at the last five days of trading for Truth Social shows that it’s been a pretty rough run of things, with most of the gains largely behind it. Over the last five days, Truth Social has lost 32.37%, and most of that loss took place today. However, there was also a much slower but much steadier downward drop in the four days preceding today’s action.
