Trump Media valued richly despite just $4m in annual sales

Trump Media & Technology Group generated just $4.1m in revenue for the full year, results reported in a filing show, providing an update on the stock that closed its blank-check deal last week. Despite the modest financials, the company was worth more than $7bn even after a 16pc drop in early trading pared its meteoric gain this year, as the meme stock continued to captivate retail traders.

The results underscore how richly valued Trump Media is relative to its peers. The company doesn't report active user numbers, disclosing in its prospectus in February only that Truth Social has about nine million sign-ups across its platforms.

Reddit, which went public last month and has a similar valuation, had 267.5 million weekly active users in the last quarter, and delivered $804m in revenue last year. Meanwhile Snap, which has a market value of $19bn, had a net loss of $1.3bn on $4.6bn in sales last year. Snap estimated daily active users for the first quarter of about 420 million.

The discrepancy between where Trump Media's shares trade and how the underlying business performs indicates that investors use it as a way to bet on Trump's push for re-election. The stock, which has been trading since 2021 under the SPAC's ticker, has tripled this year as the retail-trading crowd pumps it with posts across Stocktwits and Reddit's WallStreetBets forum.

In the filing, Trump Media's revenue inched higher from $1.47m in 2022 as it swung to an annual loss. The company recorded a $50.5m profit in 2022 after getting a boost from a change in the value related to its convertible notes.

Trump owns a 57pc stake in the company, according to the filings with the US Securities and Exchange Commission, which is worth about $4bn as shares slipped as low as $52.10 on Monday. He can't sell the stake immediately due to a six-month lock-up agreement, hindering his ability to monetise the shares and ease his present cash crunch.

Trump's media company debuted last week after the closing of the merger with Digital World Acquisition brought in more than $275m of much-needed cash. The media start-up had warned that without the deal there were concerns that it could go bankrupt.