Skip to content
- Trump Media faces $54.8M loss as crypto bets deepen concerns.
- DJT shares tumble 3% after quarterly loss and crypto exposure.
- Legal costs and crypto swings fuel Trump Media’s financial pressure.
In the third quarter, Trump Media and Technology Group, which President Donald Trump owns, showed a net loss of $54.8 million. The outcome was the third quarterly loss in a row, indicating that the company was not finding it easy to trade off between expansion and increased legal and operating expenses.
DJT stock dropped more than 3 percent to $12.90 following the report, continuing a drop of close to 25 percent in a month. The stock price of the company has currently dropped 62 percent this year, which shows the worry of the investors about the increasing financial pressure of the company.
The significant part of the loss was due to $20.3 million in legal costs associated with its merger with a special purpose acquisition company. Trump Media identified it as one of the longest SPAC deals in history, with high legal charges in the process.
In addition to the legal problems, Trump Media had to incur non-cash losses of $54.1 million that came as a result of changes in the fair value of its digital assets. Another problem that the company had was trading losses that were not realized and increasing costs on stock-based compensation that burdened its earnings.
Also Read: Evernorth Executes $280 Million XRP Transfer, Sparking Market Speculation
Trump Media Deepens Its Crypto Exposure
The firm has been increasing its presence in the market of digital assets. It also recorded the Bitcoin-related option premiums of $15.3 million in the quarter. Trump Media now possesses approximately 15,000 BTC, which is worth about $1.5 billion, nearly half of its assets.
Besides that, Trump Media purchased over 684 million CRO tokens to reinforce its collaboration with Crypto.com. The cash and stock acquisition costing $97 million will help in the launch of Truth Predict, a blockchain-based betting platform. The company is also set to incorporate the CRO rewards in its Truth Social platform.
According to CEO Devin Nunes, the company has a good operating cash flow, which would facilitate future acquisitions in high-value digital assets. It has structured a new CRO division, CRO Strategy, Inc., that will run its CRO holdings and develop more business enterprises in crypto.
The fact that Trump Media has increased the crypto coverage underscores its aggressive expansion plans to separate revenue lines. Nevertheless, the fact that the company has been recording quarterly losses and market turmoil has brought forth serious concerns about whether it can remain profitable in the long run.
Also Read: Ethereum ETF Inflows Surge Despite 12% Price Drop, Institutional Interest Remains Strong
