Daijiworld Media Network - New York
New York, Aug 11: Trump Media and Technology, the company behind President Donald Trump’s Truth Social platform, posted a massive loss of USD 238 million in the second quarter and announced plans to abandon most of its expansion into new business lines, including online betting and crypto.
The company said on Monday that its loss for the three months ended June was more than 10 times the loss recorded a year earlier. The per-share loss widened to 86 cents from 8 cents.
During a conference call following the earnings release, newly appointed chief executive Kevin McGurn said a yearlong effort to diversify into industries beyond social media would largely be abandoned as the company refocuses on its core social media mission.
“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 fell slightly in after-hours trading following the earnings announcement, after declining 8% during regular trading.
A key part of McGurn’s strategy is Truth API, a service that provides Wall Street trading firms with early access to posts from prominent users on Truth Social. This includes Trump, the platform’s most-followed user, whose posts about major US policy decisions can influence financial markets.
Trump Media has faced criticism from government watchdog groups since the beginning of Trump’s second term, with critics alleging that the company provides him with a vehicle to profit from the presidency. The Truth API service has intensified those concerns, with Democrats vowing to investigate the paid service if they gain control of Congress in the midterm elections.
McGurn dismissed the concerns, saying other companies also provide traders with special and faster access to data.
“Providing licensed real-time public data through commercial APIs is a well-established business practice across the technology, financial information and media industries,” he said. “This is no different.”
One previously announced venture, nuclear fusion, will continue. McGurn said Trump Media expects to complete its proposed merger with energy company TAE Technologies by the end of the year.
“We continue to believe it’s the single most important driver of long-term value for this company,” McGurn said, referring to the fusion business.
Much of the company’s quarterly loss was attributed to unrealised paper losses stemming from declines in the value of Trump Media’s holdings of bitcoin and the cryptocurrency token Cronos.
Excluding those paper losses, along with taxes, interest and other items, operating losses still increased but were significantly lower than the reported figure. Operating losses stood at USD 164 million, compared with USD 44 million a year earlier.
Truth API is charging customers between USD 60,000 and USD 100,000 a month, McGurn said. The company has already signed 10 customers, most of them high-frequency trading firms that execute trades within milliseconds.
“We’re in the early innings,” McGurn said, adding that the potential market extends beyond traders to data centre companies, news organisations and developers of large language models.
The 10 customers could generate between USD 7 million and USD 12 million in annual revenue for Trump Media, potentially amounting to two to three times the company’s entire revenue from the previous year.
Trump Media reported USD 1.7 million in revenue in the second quarter, more than double the figure from a year earlier.
The company has USD 1 billion in debt through special convertible notes that are not due until 2028. However, lenders have an option to demand repayment in November, potentially putting pressure on the company’s finances.
Despite the debt obligations, Trump Media appeared to have substantial liquidity. At the end of the quarter, the company held more than USD 400 million in cash and short-term investments, along with USD 1.2 billion in bitcoin and bitcoin-related assets.