Trump Media & Technology Group Corp (NASDAQ:DJT) slumped over 20% on Monday, just days after soaring on its market debut following news of hefty losses last year.
Truth Social's owner posted losses of US$58.2 million last year, against a US$50.5 million profit in 2022.
Revenue did increase from US$1.5 million to US$4.1 million, though a drop in the fourth quarter saw the figure down 39% at US$0.75 million.
Former president Donald Trump owns almost 60% of the company, which had a market valuation of as high as US$11 billion shortly after floating in New York last week through a merger with Digital World Acquisition Group.
Some US$1 billion is said to have been wiped off Trump’s net worth as a result of the slump, which took the company's market capitalisation below US$7 billion on Monday.
Analysts had previously warned that underlying business fundamentals would inevitably push through to the stock at some point, with many investors appearing to be buying shares solely in support of Trump.
Trump Media, which relies on advertising revenue from Truth Social, added in a regulatory filing that it expected to face losses and negative cash flow for the “foreseeable future”.
Alongside this, the firm warned of “substantial doubt” in holding “sufficient funds to meet its liabilities as they fall due,” after paying around US$40 million in interest last year.
Shares dropped 21.5% to US$48.66 on Monday, while pre-market trading had the stock down a further 4.4%.