Trump Media posts $238 million loss as crypto holdings tumble, pivots back to social media

Trump Media & Technology, the company behind former US President Donald Trump's Truth Social platform, reported a substantial $238 million loss for the second quarter. This figure represents a more than tenfold increase in losses compared to the same period last year, with the company's per-share loss widening significantly. The downturn was exacerbated by the declining value of its bitcoin and Cronos holdings.

Despite the financial losses, the company's revenue more than doubled to $1.7 million, an 89% increase year-over-year. However, excluding unrealized paper losses on its crypto assets, interest, and other expenses, the operating loss still rose sharply to $164 million from $44 million a year prior. As of the end of June, Trump Media held over $400 million in cash and short-term investments, alongside $1.2 billion in bitcoin and related assets.

In a strategic pivot, new CEO Kevin McGurn announced the company is abandoning ventures into online betting and cryptocurrency to refocus on its core social media business. "We made the disciplined choice to pivot in order to invest more time and resources in our most important initiatives," McGurn stated on a conference call, adding, "We will say no to things or change course as warranted."

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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.

The company is now prioritizing its Truth API service, which provides Wall Street trading firms with early access to posts from key Truth Social users, including Donald Trump. This service, priced between $60,000 and $100,000 per month, has already secured 10 customers, primarily high-frequency trading firms. With this customer base, Truth API could generate an annual revenue of $7 million to $12 million, potentially doubling the company's total revenue from last year. McGurn sees a broader market for this service beyond traders, including data center companies, news organizations, and developers of large language models.

However, the Truth API service has drawn scrutiny from good government watchdogs and Democrats, who have raised concerns about the potential for the company to profit from the presidency. McGurn dismissed these criticisms, highlighting the prevalence of similar data services in the market.

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We’re in the early innings.