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April 1 (UPI) -- Share prices for Trump Media took a nose-dive on Monday after the owner of the Truth Social app revealed it recorded a net loss of more than $52 million on scant revenues of $4 million last year. Trump Media & Technology Group Corp., which is majority-owned by former President Donald Trump, reported the numbers in an 8-K filing that sent investors on the Nasdaq exchange scurrying for the exit.
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Traded under the symbol DJT, shares in Trump Media & Technology Group Corp. fell to as low as $45.33 by Monday afternoon, representing a 23% intraday drop. Prices had rebounded a bit to $48 by 3 p.m.
TMTG went public on the Nasdaq on Tuesday after merging with special purpose acquisition company Digital World Acquisition Corp. in a deal approved by shareholders in February. By Wednesday, its share price had soared to $66.22, giving the company a paper valuation of $5.2 billion.
Some analysts last week called Trump Media's quick rise an example of a "meme stock," defined as securities which don't trade on fundamentals but rather on hype and expectations -- in this cased based on the devotion of Trump's political supporters.
Doubts as to TMTG's staying power were fueled by weak advertising revenues generated by Truth Social since its 2022 debut. Those misgivings were reinforced by Monday's release showing sales of just over $4 million and net losses reaching nearly $60 million for the full year ending Dec. 31.
The company also issued a warning to investors along with the numbers.
"TMTG has historically incurred operating losses and negative cash flows from operating activities," the filing read. "TMTG 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."
