Trump Media & Technology Group starts the year with accounts under pressure. Despite nearly $900,000 in revenue, Truth Social's parent company posted a net loss of $405.9 million in the first quarter. The net loss is mainly due to the weight of crypto in Trump Media's balance sheet, even if Bitcoin remains a pillar of its financial strategy. This gap illustrates the direct impact of digital assets on its results.
In brief
- Trump Media posts a net loss of $405.9 million in the first quarter, despite revenue limited to $871,200.
- Digital assets weighed heavily on the accounts, with $244 million in unrealized losses linked to crypto holdings.
- At the end of March, the company held 9,542.16 Bitcoin, at a cost of $1.13 billion and a fair value of $647.1 million.
- A portion of the BTC reserves serves as collateral, while Trump Media continues to develop its media, financial and streaming activities.
Crypto weighs heavily in Trump Media's accounts
Trump Media & Technology Group had $871,200 in revenue in the first quarter. This amount marks an increase of 6% compared to the $821,200 recorded a year earlier. Media activities generated $810,100, while Truth.Fi contributed $61,100 in management fees related to ETF offerings.
These losses mainly come from the group's exposure to digital assets. Trump Media announced, in a document filed with the SEC, $244 million in unrealized losses on its crypto holdings. The company also recorded an investment loss of $108.2 million, primarily related to equity securities.
This accounting treatment explains the gap between revenues and net income. Digital assets should be revalued regularly, even when they are not sold. Thus, crypto can weigh heavily on accounts from one quarter to the next, especially when prices fall.
Despite this loss, Trump Media reported positive operating cash flow of $17.9 million. This amount comes in particular from the sale of put options acquired on securities linked to Bitcoin and pledged. The group is also continuing to develop its infrastructure, its audience and future monetized functions.
Crypto exposure is not just about large market assets. Trump Media also held 756.1 million CRO tokens. Their cost price reached $113.9 million, for a fair value of $53 million. L'company completed $105 million acquisition of CRO last year under an agreement with Crypto.com.
Bitcoin remains at the center of treasury strategy
At the end of March, Trump Media held 9,542.16 BTC. Their cost price reached $1.13 billion, compared to a fair value of $647.1 million. According to data reported by the company, this position is now worth approximately $770 million.
However, part of this reserve remains blocked. Trump Media specifies that 4,260.73 BTC, valued at $289 million at the end of the quarter, serves as collateral for convertible bonds. At the same time, the company held covered call options on 4,000 BTC to reduce the effect of volatility.
This strategy comes from a choice announced last year. Trump Media had raised $2.5 billion to build a bitcoin-oriented treasury. The group then revealed a bitcoin reserve of $2 billion in July. Since then, market variations have had a direct impact on its results.
For the coming quarters, Trump Media will therefore have to develop its media, streaming and financial services activities while controlling the impact of crypto on its accounts. The ongoing merger with TAE, an American company specializing in nuclear fusion technologies, could also broaden its scope. In this context, bitcoin will remain a central indicator, but cryptocurrencies will continue to create strong accounting sensitivity.
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