3 weeks ago
Trump Media Reports $238M Loss, Abandons Crypto and Betting
Truth Social is a social media website where people can post messages.
The company that runs it, Trump Media, lost $238 million from April to June.
That is a lot more money than it lost the year before.
The company had tried to make money with digital money (crypto) and sports betting.
Now its new boss, Kevin McGurn, says it will stop those plans and focus on Truth Social.
The company is also selling a special service to Wall Street trading firms.
These firms pay a lot of money to see posts from famous people, including President Donald Trump, very quickly.
Some people worry this lets the president profit from his job.
The company says it is a normal business practice.
Trump Media will keep working on nuclear fusion, a way to make energy like the sun.
Trump Media & Technology, the company behind Truth Social, lost $238 million in the second quarter, more than 10 times the loss from a year earlier.
New CEO Kevin McGurn said the company will largely abandon expansion into online betting and crypto to refocus on its social media mission.
The company launched Truth API, a service charging $60,000-$100,000 a month that gives Wall Street trading firms early access to top posters' content, including President Donald Trump's.
Democrats have vowed to investigate the paid Truth API service if they gain control of Congress in the midterms, and watchdog groups have criticized it as a way for Trump to profit off the presidency.
The previously announced nuclear fusion venture will continue, with Trump Media hoping to close a merger with TAE Technologies by the end of the year.
The quarterly loss was driven largely by unrealized paper losses on holdings of bitcoin and a crypto token called Cronos.
- Who
- Trump Media & Technology Group, the company behind Truth Social, led by new CEO Kevin McGurn; President Donald Trump is the platform's most-followed user.
- What
- Posted a $238 million second-quarter loss and announced it is largely abandoning its crypto and online betting ventures to refocus on Truth Social, while launching a paid Truth API data service for Wall Street trading firms.
- Where
- New York (article dateline).
- When
- The three months through June (second quarter); the earnings report was released Monday.
- Why
- Much of the damage came from unrealized paper losses on falling values of bitcoin and Cronos holdings, and McGurn says the company is pivoting to invest more time and resources in its most important initiatives.
Democrats and Government Watchdogs
Trump Media Leadership
Truth API Paid Early Access
Democrats and Government Watchdogs
The paid service gives Wall Street trading firms early access to President Trump's market-moving posts, letting him profit off the presidency; Democrats vow to investigate the service if they win Congress in the midterms.
Trump Media Leadership
McGurn says providing licensed real-time public data through commercial APIs is a well-established business practice across the technology, financial information, and media industries, and that other companies also sell special fast access to traders.
Business Diversification Strategy
Democrats and Government Watchdogs
The expansion into crypto, betting, and other ventures drew criticism and contributed to a $238 million quarterly loss driven by unrealized paper losses on bitcoin and Cronos holdings.
Trump Media Leadership
McGurn calls the pivot away from those ventures a disciplined choice to invest in the company's most important initiatives, while the nuclear fusion merger with TAE Technologies remains the single most important driver of long-term value.
Key facts
- Q2 Net Loss
- $238 million, more than 10 times the year-earlier loss
- Per-Share Loss
- 86 cents, up from 8 cents a year earlier
- Q2 Revenue
- $1.7 billion, more than double a year earlier
- Operating Loss (Excluding Paper Losses)
- $164 million, vs. $44 million a year earlier
- Truth API Pricing
- $60,000-$100,000 per month
- Truth API Customers
- 10 customers, mostly high-frequency trading firms
- Projected API Annual Revenue
- $7-$12 million, about two to three times the company's entire revenue last year
- New CEO
- Kevin McGurn
- Convertible Debt
- $1 billion, due 2028, with lenders able to demand cash-out in November
Quotes
Kevin McGurn
Chief Executive Officer of Trump Media & Technology
“Providing licensed real-time public data through commercial APIs is a well-established business practice across the technology, financial information and media industries. This is no different.”
republicworld.com
“We made the disciplined choice to pivot in order to invest more time and resources in our most important initiatives. We will say no to things or change course as warranted.”
republicworld.com
Sources
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