As Donald Trump heads back to the White House his media company Trump Media & Technology Group (TMTG) posted heavy losses. Despite this, shares in the company have soared, increasing the wealth of the President-Elect.
The parent company of Trump’s social networking site Truth Social lost $19.2m (€17.83m) in the last quarter, according to an earnings report released on the day he got re-elected as the next President of the United States.
Trump created the company after he was banned from Twitter and Facebook following the Capitol riot on 6 January 2021.
Despite poor results, the company’s stock price surged on Wednesday.
The share price became so volatile on Wednesday, that Nasdaq had to halt trading in TMTG shares.
At one point the share was priced at more than $45, though it later cooled down and dipped below $36 by the end of the trade. The closing price puts the market capitalisation of TMTG at $7.2bn (€6.69bn). Trump’s majority stake, 58.9% in the company is worth about $4.1bn (up from $3.9bn as of the close of trading Tuesday).
According to Forbes, Donald Trump’s net worth was $5.6bn (€5.2bn) right before the elections, and his most valuable asset, his stake in the parent company of Truth Social was worth $3.5bn (€3.25bn) on 4 November.
However, the rally in TMTG shares boosted the value of his 57% stake in the company. He 114.75 million shares that he owns are now worth $4.1bn (€3.8bn).
Part of the gain was due to the rise in the share price the previous day, but according to Forbes’ calculations, the President-Elect has seen the value of his stake in the company soar by almost $300m (€270m) on the day he was elected to become the 47th president of the United States.
According to this calculation, Donald Trump is worth about $6.2bn (€5.76bn) the morning after Election Day.
The wild swings in Trump Media shares, coupled with its declining revenue and losses, puts down the interest in the stock to the success or failure of Donald Trump.
However, as the Telegraph reported, it is possible that shares could have also been boosted by speculation that Elon Musk’s X might buy the company eventually.
Losses due to legal fees at Trump’s Media company
Trump Media and Technology Group reported on Tuesday that much of its $19.2m (€17.85m) loss stemmed from more than $12m (€11.16m) in legal fees, along with a decline in revenue.
Revenue for the three-month period that ended on September 30 was just over $1m (€930,000), down nearly 6% from a year earlier. Trump Media, based in Sarasota, Florida, has lost more than $363m (€337m) so far this year.
Trump Media said some of its costs related to the launch of its new TV streaming service called Truth+.
CEO and former Republican US Rep. Devin Nunes said in a statement the company “continues to explore additional possibilities for growth” such as mergers with other companies that “would benefit from Trump Media technology and branding”.
The company said in a regulatory finding that its success depends in part on “the reputation and popularity of President Donald J. Trump”.
