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Former president Donald Trump ’s digital mass medium company is lose money , and stacks of it . But why is that any unlike from other “ startups , ” which often shin to send a profit for years , if they ever do ?
There are a duad reason .
First , as a recapitulation : Trump Media and Technology Group ( TMTG ) recently merged with Digital World Acquisition Corp. in a SPAC , the ill - starred financial cat’s-paw that , more often than not , represents a last - ditch option for a square hard cash infusion . The company is on the NASDAQ as , predictably,$DJT .
An of import part of going public is revealing your funds to all the world , and TMTG recentlyfiled its first quarterly fiscal reportwith the SEC that everyone can attend at and analyze . The financial printing press is having a field day , but the upshot is that TMTG is losing a lot of money and generate next to none . Specifically , the company lost $ 58 million on only $ 4 million in tax income .
Those inclined to be benevolent to a tech startup challenging entrenched rivals — regardless of its “ mission ” or leadership — may reasonably detect that this unbalance is common among early - stage companies with heavy ambitions . And so it is — who can block that Uber operated with terrific losses for years in edict to cave the taxi industriousness ’s clientele model ?
TMTG is superficially similar , principally in that it does n’t make money . But that does n’t make it a startup on the verge of explosive growth . There are three big , straightforward reasons why :
The result is , as the analysts have already point out , that $ DJT is basically and wildly overvalued . The company is unlikely to make a net profit anytime before long , rent alone the kind of profit that would justify the share price and multi - billion - clam valuation . Even the most affirmative scenarios credibly envision solvency as a far - off goal .
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On the other manus , give the majority possessor ’s personal , political , effectual , and business woes , there is a very literal risk of exposure that the whole thing will go off before the year is out .
Truth Social SPAC could pay Trump ’s astronomical legal bills — if board approves it
The fact of the matter is that the share price is completely unconnected to the performance of the company , turn in it fundamentally a “ meme stock ” that will be price arbitrarily and perhaps manipulated by public investors .
While that may make a few day dealer and short Peter Sellers money over the next few day and weeks , it ’s not the form of thing that retain economic value retentive - term , particularly with TMTG ’s deficiency of asset . By the metre cornet is able-bodied to sell his plowshare , it ’s potential this company wo n’t be deserving anything like what it supposedly is today . It ’s not even worth what it was this sunup , with the stock down more than 20 % since the market opened .
