While social media giants like Facebook parent Meta typically report numbers such as monthly active users to gauge how much engagement a platform is generating, Truth Social parent Trump Media & Technology Group (TMTG) pointed out that since its inception, management hasn’t used such data. Meanwhile, its auditor filed what is colloquially termed a “going concern” notice (boilerplate language for companies with low revenues and high losses), expressing “substantial doubt whether it can continue operating” in such fashion: In other words, it may not be a viable company. 

For its part, regarding key performance indicators, or KPIs, the company said those metrics “are not critical in the near future,” owing to the early-stage development of the Truth Social platform.

“At this juncture in its development, TMTG believes that adhering to traditional key performance indicators, such as sign-ups, average revenue per user, ad impressions and pricing, or active user accounts including monthly and daily active users, could potentially divert its focus from strategic evaluation with respect to the progress and growth of its business,” the company said in the filing. “TMTG believes that focusing on these KPIs might not align with the best interests of TMTG or its shareholders, as it could lead to short-term decision-making at the expense of long-term innovation and value creation.”

Still, the filing did reveal that Truth Social has seen an aggregate of about 9 million sign-ups via iOS, Android, and the web as of mid-February.

Meanwhile, SimilarWeb has estimated that Truth Social’s monthly website visits in February were 5 million worldwide. By contrast, Reddit’s were 2 billion last month, according to SimilarWeb.

Shares of Trump Media & Technology Group sank 21.5%, to close at $48.66 after an SEC filing showed the company lost $58.2 million last year on revenue of $4.13 million. The SPAC had gained meme-stock status in the near-week it was trading, soaring as high as $78 at one point, swelling Trump’s net worth.

Jay Ritter, a professor and expert on initial public offerings at the University of Florida’s Warrington College of Business, said it’s a perfectly viable business strategy not to worry about short-term profitability as a company builds market share. But here, it appears that all the metrics that the company can think of aren’t going in the right direction. “The company is saying, ‘We want to be dynamic and robust,’ because none of these traditional metrics are really working in [their] favor.”

“They’re not fessing up and saying, ‘Our business model is failing,’” added Ritter.

Still, there has been more than one company that started with one business model, pivoted when it didn’t work, and later became profitable. While that could happen in this case, the question is how profitable, Ritter noted. “The valuation changes by the billion from day to day,” he said.

Last week, Ritter suggested the stock price might fall 95% from its first-day trading price of $57.99. That would be the upside potential, he said today. 

TMTG, with Truth Social, “aspires to build a media and technology powerhouse to rival the liberal media consortium and promote free expression,” the company wrote in disclosures. It aims to compete with X, Netflix, Alphabet, Amazon, and other companies that TMTG believes “collude to curtail debate in America and censor voices that contradict their woke ideology.” The company merged with Digital World Acquisition Corp., a blank check company formed in 2020.

Among other disclosures made today, Digital World Acquisition Corp.’s public accounting firm, Adeptus Partners, wrote that it is uncertain the company could continue as a going concern and that the merger could be executed on time. If it isn’t, “there will be a mandatory liquidation and subsequent dissolution of the company.

“The financial statements do not include any adjustments that might result from the outcome of this uncertainty,” the accounting firm’s report states.

These types of statements in reports aren’t uncommon among companies with no revenue, such as biotech firms, noted Ritter. That’s basically an accountant saying that things can’t continue on for long with low revenues and current losses, he added.