As Americans held their breath awaiting the outcome of a contentious presidential election, Donald Trump’s fledgling social media company delivered an unexpected bombshell of its own. In a surprise earnings report dropped on election night, Trump Media & Technology Group (TMTG) revealed it continues to hemorrhage money while struggling to gain traction in a cutthroat industry.
The company behind Truth Social, Trump’s micro-sized answer to Twitter, reported a staggering net loss of $19.2 million in the third quarter. That’s on top of a paltry $1 million in revenue, marking a 6% decline from the same period last year. The dismal figures underscore the daunting challenges facing the startup as it attempts to carve out market share from far larger, more established competitors.
A Rocky Road Since Launch
Launched with great fanfare in early 2022, Truth Social aimed to be a “Big Tech” alternative, a haven for conservative voices feeling silenced on mainstream platforms. Yet the app’s growth has been anemic compared to the likes of Facebook, Instagram, TikTok, and Elon Musk’s newly-rebranded X (formerly Twitter).
Devin Nunes, the former congressman handpicked by Trump to lead TMTG, put his trademark spin on the disheartening report. He touted an “extraordinary quarter” while hyping the company’s “legion” of retail investors. But a closer look at the numbers paints a less rosy picture:
- Monthly active users languish around 782,000 versus X’s 450 million
- Quarterly revenue slumped to $1 million, a far cry from Meta’s $32 billion
- Net losses hit $19.2 million as legal fees and R&D spending pile up
Nunes teased plans for expansion, hinting at potential acquisitions “in the realm of fintech.” But without significant user growth and revenue, those ambitions may remain out of reach. As one industry observer put it, “You can’t buy your way to relevance if nobody’s using your product.”
Stock Price Rollercoaster
TMTG’s sputtering performance hasn’t stopped its stock, which trades under the apt ticker symbol “DJT”, from experiencing whiplash-inducing swings. In the final weeks of the campaign, shares more than tripled in value before coming back down to Earth.
On election day, Nasdaq halted trading of DJT multiple times as prices fluctuated wildly, soaring 18% before closing down over 1%. After-hours trading following the earnings bombshell saw an initial 6% bump evaporate.
“This stock has all the hallmarks of a meme play,” noted one Wall Street analyst who requested anonymity to speak candidly. “Highly volatile, detached from fundamentals, powered by online hype. It’s not for the faint of heart.”
Indeed, DJT has become a darling of the same retail investor crowd that made GameStop a household name during the pandemic. That grassroots support has propelled TMTG to an eye-popping $6.8 billion valuation since its market debut, enriching Trump personally thanks to his majority ownership stake. On paper, at least.
An Uncertain Path Forward
With Trump’s political future now hazy at best, TMTG finds itself at a crossroads. The company’s fortunes have long been intertwined with those of its famous founder, for better or worse. A Trump loss could sap enthusiasm among his base, deflating download numbers and drying up the wellspring of “meme stock” momentum.
There are also signs that Truth Social’s novelty may be wearing off. Many high-profile conservative influencers who flocked there initially have seen engagement decline in recent months. Some have returned to posting more regularly on the larger megaphone of X/Twitter.
For Trump, who often conflated his personal brand with the health of the overall economy as president, this latest venture’s woes cut against his familiar image as a business titan. While his portfolio has always been a mixed bag, results this dismal are harder to paper over with bluster and hype.
As the political and economic establishment Trump long railed against breathes a tentative sigh of relief, his path to social media disruptor looks rockier than ever. If Truth Social and TMTG are to avoid ending up as costly vanity projects, they’ll need more than memes and retail rage traders to write their next chapter. For a man who prizes superlatives, Trump may need to confront a humbling reality: in this arena, he remains an underdog.
