Topline<\/p>\n
Trump Media & Technology Group, the parent of Truth Social, disclosed \u201cmaterial weaknesses\u201d in its financial reporting controls\u2014acknowledging the risk of errors in its financial statements\u2014according to a new filing with the Securities and Exchange Commission.<\/p>\n
President Donald Trump gestures while speaking during an executive order signing event in the White … More House on March 31. (Photo by Andrew Harnik\/Getty Images)<\/p>\n
Getty Images <\/p>\n
Key Facts<\/p>\n
Trump Media reported<\/a> its quarterly earnings on Friday, disclosing a $31.7 million net loss on $821,000 in net sales with $758.9 million in cash and short-term investments and $9.8 million in debt.<\/p>\n In the filing, the company disclosed finding \u201cmaterial weaknesses\u201d in its internal controls over financial reporting, citing a lack of formal accounting processes for complex transactions and insufficient personnel experienced in SEC reporting requirements.<\/p>\n As a result, Trump Media warned \u201cthere is a reasonable possibility\u201d that \u201cmaterial misstatements\u201d may have appeared in its financial filings.<\/p>\n The company says it has hired more accounting staff, brought in third-party consultants and begun formalizing its processes, but acknowledges it still has more work to do.<\/p>\n A spokesperson for Trump Media dispute the significance of the disclosure: \u201cIn a deliberately dishonest hit piece, Forbes misrepresents a routine disclosure that TMTG has repeatedly made in the past, and is typical for former shell companies, that does not in any way indicate an intention to restate any of TMTG’s financial reporting.\u201d<\/p>\n Crucial Quote<\/p>\n \u201cTMTG is committed to remediating the material weaknesses described above and continuing remediation efforts during 2025,\u201d Trump Media stated in its filing, which was signed by CEO Devin Nunes and CFO Phillip Juhan.<\/p>\n Surprising Fact<\/p>\n Just six weeks before the disclosure, Nunes certified<\/a> to the SEC that Trump Media\u2019s internal controls \u201cprovide reasonable assurance\u201d of accurate financial reporting.<\/p>\n Chief Critic<\/p>\n \u201cAny time a company discloses a material weakness in terms of accounting, investors should absolutely pay attention,\u201d said Michelle Leder, editor of footnoted<\/a>, a site that analyzes what companies try to bury in SEC filings. Leder, who flagged the Trump Media disclosure to Forbes, added: \u201cIt\u2019s often a precursor to an earnings restatement.\u201d<\/p>\n Key Background<\/p>\n Trump Media went public in March 2024 through a merger with a blank-check company, more than two years after it was founded following Trump\u2019s departure from the White House. In addition to Truth Social, it runs the streaming video service Truth+ and is expanding into financial services. President Donald Trump owns 115 million shares\u2014about 58% of the company\u2014worth $2.9 billion as of Friday\u2019s close, through his revocable trust. While unrelated to Trump Media, Trump does have a history of financial record-keeping problems: He was convicted<\/a> in May 2024 on 34 felony counts of falsifying business records, and the Trump Organization was found guilty<\/a> of criminal tax fraud, scheming to defraud, conspiracy and falsifying business records in December 2022.<\/p>\n Tangent<\/p>\n Nunes earned $47 million<\/a> in total compensation in 2024, though much of it is tied up in restricted stock he can\u2019t access until 2027. Donald Trump Jr., who serves on the company\u2019s board, was paid $813,000<\/a> last year\u2014despite attending just two of its five meetings, according to an SEC filing. That compensation came as Trump Media reported a $401 million net loss<\/a> on just $3.6 million in sales for the year.<\/p>\n Surprising Fact<\/p>\n Accounting firm BF Borgers, which had audited Trump Media, was charged with \u201cmassive fraud\u201d<\/a> by the SEC in May 2024 for failing to follow basic accounting standards across more than 1,500 filings. The firm, which audited over 500 public companies, was fined $12 million and banned for life from the industry.<\/p>\n Big Number<\/p>\n $5.5 billion. That\u2019s Trump Media\u2019s market capitalization<\/a> as of Friday\u2019s close.<\/p>\n Forbes Valuation<\/p>\n Forbes estimates Donald Trump<\/a> is worth about $5.4 billion, with much of his wealth coming from his shares in Trump Media.<\/p>\n Editor\u2019s Note<\/p>\n In November 2023, Trump Media sued 20 media outlets, including Forbes, for reporting that included calculations of its financial results while still a private company. The defendants have moved to dismiss the claims.<\/p>\n Further Viewing <\/p>\n Further Reading<\/p>\n Trump Media Executives Launch New SPAC Seeking $179 Million\u2014And Target Crypto, Defense Sectors<\/a> (Forbes)<\/p>\n Truth Social Hosted Party At Trump\u2019s Mar-A-Lago<\/a> (Forbes)<\/p>\n Trump-Linked SPAC Spent $10.8 Million On Legal Fees Amid Regulatory Probes<\/a> (Forbes)<\/p>\n When It Comes To Truth Social, Republicans In Congress Aren\u2019t Buying What Trump\u2019s Selling <\/a>(Forbes)<\/p>\n Trump\u2019s New Jersey Golf Clubs Can Keep Selling Alcohol\u2014For Now\u2014Despite President\u2019s Felony Conviction. Here\u2019s Why.<\/a> (Forbes)<\/p>\n