The Trump Media & Technology Group, the owner of the Truth Social platform, released new financial data on Monday showing that the company lost $58 million over the last year while posting revenues totaling just $4 million.
The new numbers raised eyebrows about the company's stock price, which surged last week and gave the company a market cap of more than $7 billion at the close of trading.
Progressive journalist and commentator Judd Legum, for one, attributed the firm's share prices to Trump supporters who are investing in the company to demonstrate their political devotion to the former president.
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However, he warned that they would come to regret this investment decision given that the company itself is "basically a money incinerator."
Journalist Bill Grueskin, meanwhile, took stock of the firm's dreadful financial numbers and then contrasted it with its multibillion-dollar market cap before declaring, "This isn't an April 1 joke."
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Washington Post tech reporter Drew Harwell argued that Truth Social's underlying financials are "way out of sync with the frenzied stock-market debut that just valued it at $8 billion," and he noted that the company's shares were "crashing on the news."
Options trader Nick Yoder, who last week noted that there was an unprecedented demand for short-selling Truth Social shares, said the new data would only confirm investor suspicion that the company's share price is in a bubble that will eventually pop.
"Why is there an unprecedented level of interesting in shorting DJT (Truth Social stock)?" he asked. "One apparent reason: This '$13 Billion' company has less revenue than the small lumber yard next to my parent’s house. Currently trading at a Market Cap / Revenue ratio of around 1,500x (many companies have a multiple of 1x)."
NPR media analyst Eric Deggens took a broader view to argue that Truth Social's wildly inflated share price was an indictment on American capitalism as a whole.
"News that Trump's Truth Social lost $58 million last year just highlights a central, terrible truth about the stock market: Companies hold value because a bunch of people are willing to buy their stock - not because they are actually good businesses," he wrote.
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