(Reuters) -Shares of Donald Trump’s social media company plunged more than 23% on Monday, wiping out the gains from its debut last week, after disclosing millions in losses and saying it would struggle to meet its financial liabilities going forward.

Trump Media & Technology Group lost more than $58 million in 2023, the company said in a filing, sending shares reeling less than a week after the Truth Social parent went public through a high-profile blank-check merger.

The stock surged on March 26 on its debut, fueled by retail buyers, including some supporters of the former president, who is once again the Republican nominee in the 2024 election.

However, Monday’s disclosure brought out sellers, sending the stock down $14.45, or 23%, to $47.51 on more than 14 million shares. It had closed at nearly $58 on its first day of trading.

“As of December 31, 2023 and 2022, management has substantial doubt that TMTG will have sufficient funds to meet its liabilities as they fall due, including liabilities related to promissory notes previously issued by TMTG,” the company said.

The public offering could eventually provide a windfall of billions of dollars for the former president, depending on the value of the shares. Trump will own between 58% and 69% of the company, but he is not allowed to sell any of his shares in TMTG for six months or borrow against them, based on terms he previously agreed.

Even with the stock’s decline, it still had a market value of $6.3 billion, compared with social media platform Reddit’s market capitalization of $8 billion. The latter has 73 million active users, whereas Truth Social only discloses its total number of sign-ups, which come to 8.9 million.

Truth Social’s revenue was $4.13 million last year, up from $1.47 million in 2022, it said in a filing. By comparison, Reddit brought in revenue of $800 million in 2023.

Trump’s company remains embroiled in a legal battle with its co-founders Wesley Moss and Andrew Litinsky. On Monday, a Delaware judge said he wanted the pair and Trump Media to set a date this month for a hearing to determine if the two should receive the 8.6% stake in the company they claim they are owed.

Trump Media and the pair have sued each other in Delaware and Florida state courts.

© Reuters. FILE PHOTO: The Truth social network logo is seen displayed behind a woman holding a smartphone in this picture illustration taken February 21, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

The co-founders accused Trump Media of trying to improperly dilute their stake. The company said they had failed to earn their shares and that it was seeking to strip them of their ownership and wanted a judge to declare they had no right to appoint two board members.

Trump Media said it expects to incur operating losses and negative cash flows from operations for the foreseeable future.





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