Trump Media’s Q1 loss widens to $406 million on bitcoin, CRO markdowns

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Trump Media & Technology Group (DJT) recently reported its financial results for the first quarter, showcasing a net loss of $405.9 million on revenue of $871,200. This represents a significant widening of losses from $31.7 million in the same period last year, mainly due to unrealized losses on its cryptocurrency holdings.

The parent company of Truth Social recorded $244 million in unrealized losses on its cryptocurrency holdings, along with a $108.2 million investment loss primarily tied to equity securities. Trump Media disclosed that it held 9,542.16 bitcoin at the end of March, with a cost basis of $1.13 billion and a fair value of $647.1 million. The company’s bitcoin holdings are now valued at around $770 million.

Additionally, Trump Media also held 756.1 million CRO tokens, with a cost basis of $113.9 million and a fair value of $53 million. This investment was part of a Crypto.com deal that linked the token to Truth Social and Truth+ rewards.

Operating cash flow for the quarter stood at $17.9 million, aided by the sale of put options on pledged bitcoin and bitcoin-related securities. A portion of the company’s bitcoin holdings is locked up, with 4,260.73 BTC serving as collateral for convertible notes, valued at $289 million. Furthermore, DJT also held covered call options on 4,000 BTC to hedge its exposure to cryptocurrency volatility.

Last year, the company raised $2.5 billion for a bitcoin treasury strategy and disclosed a $2 billion bitcoin stack in July. Despite the significant losses, revenue saw a 6% increase from the previous year, with media revenue at $810,100 and Truth.Fi generating $61,100 in management fees linked to ETF offerings.

Moving forward, Trump Media & Technology Group aims to navigate the volatile cryptocurrency market while continuing to grow its media and technology offerings. The company’s strategic investments in bitcoin and other digital assets will play a crucial role in shaping its financial performance in the coming quarters.