New York
CNN
—
Former President Donald Trump’s social media business is making a big bet on streaming as the rest of the company brings in shockingly little money.
Even though Trump Media & Technology Group (DJT) is valued at $5 billion, the Truth Social owner revealed Friday evening it made just $837,000 in revenue last quarter. That marks a 30% drop from the year before.
Trump Media’s losses are piling up, too. The company lost another $16.4 million during its first full quarter as a public company.
But Trump Media is hoping to turn things around by building a streaming business catering to conservatives.
Still, the latest bleak financial results drove Trump Media’s share price 4% lower on Monday and raised further questions about why Wall Street has placed such a high price tag on the company. The Truth Social owner has now lost more than a quarter of its value since Vice President Kamala Harris jumped into the race for the White House three weeks ago.
Last week, Trump Media launched Truth+, a TV streaming platform available on Android, iOS and the Web versions of Truth Social.
Hoping to seize on the streaming success of Fox News and other conservative outlets, Trump Media said it wants to stream shows that include news, “Christian content and family-friendly programming.”
In particular, Trump Media said it will air shows “neglected by big corporations” or “at risk of cancellations.” Trump Media did not provide any examples of shows.
“The company believes that it has laid the foundation for a core driver of long-term revenue and value,” Trump Media said in its earnings release on Friday.
Truth Social was founded as a conservative counterweight to powerful tech companies in Silicon Valley.
Now, Truth+ is being positioned as an alternative to traditional streaming platforms, some of which are controlled by Big Tech firms like Amazon and Netflix.
Trump Media “expects to gain full control over its tech delivery stack for streaming…consistent with the goal of rendering the service uncancellable by Big Tech,” the company said.
In particular, Trump Media says its streaming platform relies on the company’s own custom-built content delivery network, powered by its own data center, servers, routers and software. Trump Media said it will have the right to secure the source code in the future for the streaming technology.
Of course, streaming is no simple business to enter, especially now.
If anything, some consumers are looking to cut down on how many platforms they subscribe to as they deal with the higher cost of living.
And streaming is a notoriously cost-intensive industry due to expenses linked to content and technology.
Even some of the biggest media giants have struggled to make money on streaming, with signs that some platforms are looking to join forces.
Trump Media blamed a chunk of its quarterly loss of $16.4 million on IT consulting and software licensing expenses linked to the new TV streaming service.
But Trump Media is betting it can stomach these costs.
Devin Nunes, the former Republican Ccongressman who now serves as Trump Media’s CEO, hailed the company’s “strong balance sheet with no debt” in a statement Friday. Trump Media listed $344 million of cash and equivalents – financial firepower it plans to use to build out streaming.
“In addition to our plans to build out Truth+ with an array of new features,” Nunes said, “we continue to explore numerous other possibilities for growth, including mergers and acquisitions.”
Trump Media’s volatile share price has been under significant pressure in recent weeks, wiping out a chunk of Trump’s net worth.
The stock is down by more than 60% since its record closing high of $66.22 on March 27, shortly after it went public by merging with a blank-check company.
Trump not only serves as the chairman of Trump Media, he is the dominant shareholder, with 114.75 million shares.
That value of that stake has been cut in half, shrinking from about $6.2 billion on May 9 to $2.9 billion now.