Trump Media & Technology Group (TMTG), the parent company of "Truth Social," reported a second-quarter loss of $238 million, approximately 7.865 billion baht, more than 10 times the loss in the same period last year. This was due to the impact of falling cryptocurrency values. The company also announced it would cancel plans to expand its crypto and online gambling businesses to refocus on developing its main social media platform and commercial stock trading data services.
Trump Media & Technology Group (TMTG), the media and technology company owned by former President Donald Trump and owner of the "Truth Social" platform, reported its second-quarter earnings for April through June with a net loss of $238 million, about 7.865 billion baht. This loss increased more than tenfold compared to the same period last year, when the loss was approximately $22 million.
The company stated it earned $1.7 million in revenue during the quarter, up 89% from the previous year. However, overall earnings were heavily pressured by the decline in value of digital assets held, especially Bitcoin and the Cronos digital token.
Excluding accounting losses from the decline in digital asset values, as well as taxes, interest, and other items, the company had an operating loss of about $164 million, a significant increase from $44 million the previous year.
These results came after Trump Media expanded beyond media, investing in cryptocurrencies, clean energy, and concepts for online gambling. However, Kevin McGovern, the new CEO, stated the company would make a major strategic shift to focus more on its social media business.
McGovern said the company made a disciplined decision to redirect its focus, dedicating time and resources to its most important projects, and indicated it would discontinue or modify business lines that were no longer appropriate.
One key business the company is pushing is the Truth API, which allows securities firms to access important posts on Trump Media ahead of the general public, especially posts from accounts that influence markets, including Trump's own account. Trump often uses Truth Social to announce important U.S. government policies or stances, which can affect stock and asset prices.
The company revealed that the Truth API charges fees of about $60,000 to $100,000 per month and has over 10 registered clients, mostly high-frequency trading firms able to execute trades within fractions of a second.
McGovern estimated the service could generate annual revenues of approximately $7-12 million if it maintains 10 clients, potentially representing two to three times the company's total revenue last year. The target market extends beyond securities firms to include data centers, news agencies, and developers of large language models.
However, Truth API has sparked ethical debates and conflicts of interest since the Trump family remains major shareholders. Given Trump's posts on Truth Social can influence market movements, questions arise about whether it is appropriate for the company to charge investors for faster access to this information than the general public.
U.S. government governance watchdogs have criticized Trump Media since Trump's return to office for a potential conflict where the company might financially benefit from the presidency. Meanwhile, the Democratic Party has announced plans to investigate the service if they gain congressional majority in the upcoming midterm elections.
McGovern dismissed these concerns, stating that providing real-time public data through commercial APIs is a widely used approach in technology, finance, and media industries.
Regarding the previously announced nuclear fusion energy business, Trump Media plans to proceed. It expects to complete a merger deal with TAE Technologies, a nuclear fusion technology developer, by the end of this year. Executives view this business as a key factor for the company's long-term value creation.
At the end of Q2, Trump Media held total assets of about $2 billion, including approximately $1.9 billion in financial assets such as cash, short-term investments, and digital assets. The company had over $400 million in cash and short-term investments and held Bitcoin and related assets valued at about $1.2 billion.
The company also had approximately $1 billion in convertible notes due in 2028, but creditors have the right to demand early repayment by November, which could impact the company's financial position despite its currently high cash and liquid asset levels.
Following the earnings announcement, Trump Media's stock dropped about 8% in regular trading and declined slightly in after-hours trading, reflecting investor concerns over the increased losses and uncertainty about recent business expansion strategies.
. . .Associated Press/BBC