Trump Media Posts Wider Loss Amid Rising Legal Costs

Truth Social parent struggles to convert visibility into revenue

Trump Media & Technology Group (TMTG), the company behind the Truth Social platform, reported a significantly larger third-quarter loss and a slight decline in revenue. The results reflect mounting operational and legal expenses, which continue to challenge the firm’s financial stability. Shares fell over 3% in morning trading following the announcement, extending a volatile run since the company went public in March 2024. Despite its high-profile association with President Donald Trump, the platform has yet to establish a sustainable business model.

Revenue Decline and Legal Burden

For the quarter ending in September, TMTG reported $972,900 in revenue, a 3.8% drop compared to the same period last year. The company’s net loss widened to $54.8 million, up from $19.2 million a year earlier, with $20.3 million attributed to legal expenses. Much of the spending was linked to the company’s merger with a special-purpose acquisition firm, which facilitated its public listing. Advertising remains the primary source of income, but engagement levels on Truth Social have not translated into meaningful growth.

Unlike other social media firms, TMTG does not disclose user metrics such as monthly or daily active users. This lack of transparency makes it difficult for analysts to assess platform performance or forecast future revenue. CEO Devin Nunes, a former U.S. congressman, has emphasized the platform’s role as Trump’s main communication channel. However, monetizing that visibility continues to be a challenge, especially in a competitive digital media landscape.

Crypto Strategy and Asset Expansion

In August, TMTG entered a partnership with Crypto.com and a blank-check acquisition firm to launch a venture focused on accumulating CRO tokens. This move signals a deeper commitment to the cryptocurrency sector, aligning with broader efforts to diversify revenue streams. The company reported $3.1 billion in financial assets at the end of Q3, including cash, short-term investments, and digital holdings. Despite the quarterly loss, TMTG maintained positive operating cash flow of $10.1 million, largely driven by crypto-related income.

The firm’s crypto holdings generated $28.7 million in income during the quarter, suggesting that digital assets may play a growing role in its financial strategy. This treasury-style approach reflects a shift toward alternative asset management, though it introduces new risks tied to market volatility. Analysts remain cautious about the long-term viability of such strategies, especially given the regulatory uncertainties surrounding crypto. Still, the company views its expanding asset base as a foundation for future growth.

Market Volatility and Investor Sentiment

Since its public debut, TMTG’s stock has experienced sharp fluctuations, often influenced by political developments and retail investor momentum. The lack of consistent performance indicators and the company’s reliance on a single public figure have contributed to its unpredictable valuation. Legal challenges and operational costs continue to weigh on investor confidence, despite the firm’s efforts to diversify. The broader market remains skeptical about whether Truth Social can evolve into a profitable platform.