Dhaka: President Donald Trump’s media company reported a massive loss in the second quarter and announced plans to abandon several new business ventures and refocus on its core mission as a social media platform.
According to United News of Bangladesh, Trump Media and Technology, which operates the Truth Social platform, stated that it lost $238 million in the three months through June after expanding into businesses outside traditional media, including cryptocurrency. The loss was more than 10 times the amount recorded a year earlier, with the loss per share widening to 86 cents from 8 cents.
During a conference call following the earnings release, new CEO Kevin McGurn announced that the company would largely abandon a yearlong effort to expand into industries such as online betting and cryptocurrency. Instead, they will concentrate on their social media business. “We made the disciplined choice to pivot in order to invest more time and resources in our most important initiatives,” McGurn said. “We will say no to things or change course as warranted.”
Trump Media shares experienced a slight decline in after-hours trading following the earnings announcement, having already fallen by 8% during regular trading. A key part of McGurn’s strategy is Truth API, a service providing Wall Street trading firms with early access to posts from prominent Truth Social users, including Trump, the platform’s most-followed account, who often influences financial markets by announcing major U.S. policy changes on the site.
Trump Media has faced ongoing criticism from government watchdog groups since the beginning of Trump’s second term, with accusations that the company provides a way for Trump to profit from the presidency. The new service has intensified these concerns, while Democrats have vowed to investigate the paid service if they regain control of Congress in the midterm elections. McGurn dismissed the concerns, comparing the service to established business practices in the technology, financial information, and media industries.
One previously announced venture, nuclear fusion, will continue. McGurn noted that Trump Media expects to complete its previously announced merger with energy company TAE Technologies by the end of the year, asserting it as the single most important driver of long-term value for the company.
Much of the company’s quarterly loss resulted from unrealized losses tied to declines in the value of its bitcoin holdings and a cryptocurrency token called Cronos. Even after excluding those paper losses, along with taxes, interest, and other items, the company’s operating loss increased, though by a much smaller amount. The adjusted loss was $164 million, compared with $44 million a year earlier.
McGurn stated that Truth API charges customers between $60,000 and $100,000 a month and has already signed 10 customers, mostly high-frequency trading firms. With 10 customers, the service could generate between $7 million and $12 million in annual revenue, potentially two to three times Trump Media’s total revenue last year.
Trump Media reported $1.7 million in revenue in the second quarter, more than double the figure from a year earlier. The company has $1 billion in debt through special convertible notes not due until 2028. However, lenders have an option to demand repayment in November, which could put pressure on the company’s finances, although Trump Media appeared to have sufficient cash. At the end of the quarter, the company held more than $400 million in cash and short-term investments, along with $1.2 billion in bitcoin and bitcoin-related assets.