Trump Media shares plummeted after the company posted a $327.6 million loss in the first quarter

Shares of Trump Media & Technology Group fell sharply this Tuesday after the company revealed that it recorded losses of $327.6 million in the first quarter of 2024, with revenues that barely reached $770,500 as a result of its advertising initiative.

These losses include $311 million in non-cash expenses resulting from the company's merger with Digital World.

Following the revelation, shares of Trump Media, owned by Truth Social, fell more than 10% on Tuesday, before recovering slightly to close at $44.19 per share, a figure that is languishing from its peak of nearly $72 during its initial public offering in March.

At the end of the day, the stock's decline was 8.6%.

The Trump Media report revealed that the impairment for the three-month period ended in March equals a net loss of $3.61 per share attributable to common shareholders.

The report's disclosure comes at an extremely delicate time for Trump Media. The company fired its auditor, B.F. Borgers, who was accused of “massive fraud” by the Securities and Exchange Commission earlier this month.

For the same reason, the disclosure of the financial report had been delayed.

It also occurs at a delicate moment in legal and billing terms for its main shareholder, former President Donald Trump, who owns a stake of almost 65% of the company, valued at about $6 billion.

Despite the poor revenue and subsequent stock decline, Trump Media, in its report, blamed the losses on non-cash expenses resulting from the conversion of notes and the elimination of prior liabilities, explaining that the focus of the current business is developing products for the future.

“At this early stage in the Company’s development, TMTG remains focused on long-term product development, rather than quarterly revenue,” the report reads.

In fact, the company announced that it will most likely continue to report losses in the near future.

In its report, Trump Media noted that before going public, it “historically incurred operating losses and negative cash flows from operating activities.”

Therefore, the company “expects to continue to incur operating losses and negative cash flows from operating activities for the foreseeable future, as it works to expand its user base, attracting more platform partners and advertisers.”