Trump’s Truth Social plummets as financials show massive losses

Trump’s social media platform’s shares plummet following dismal earnings: Former US President Donald Trump’s social media platform, Truth Social, closed down nearly 22% yesterday after the company disclosed an annual net loss of USD 58 mn. The company’s 4Q 2023 revenues fell more than 25% q-o-q to USD 751.5k, “showing it is struggling to build advertising and subscription sales from a platform it says has signed up 9 mn users,” the Financial Times says.

ICYMI- The company went public with a Spac on the Nasdaq last week, with shares rising 16% on their debut, valuing the company at USD 7.85 bn at the time. Bloomberg and the Wall Street Journal also have the story.

Trump’s net worth also plummeted USD 1 bn to USD 6.4 bn, a 14% decline, according to Bloomberg data.

(Speaking of Trump: He posted a USD 175 mn bond yesterday in a civil case, narrowly avoiding the seizure of some of his assets.)

ALSO- Are the Magnificent Seven now the Fab Four? Apple, Tesla, and Alphabet shares have all sputtered in the first three months of the year, but the S&P 500 still turned in its best Q1 since before covid-19 became a household word. Nvidia, Meta, Microsoft, and Amazon have left the other three behind, with some analysts now dubbing them the Fab Four as their share prices keep appreciating, the Wall Street Journal notes.

SIGN OF THE TIMES- Everyone from Citadel’s Ken Griffin to Bloomberg Economics is raising flags that US borrowing is “on an unsustainable path.”

MEANWHILE- The bloom is still off the rose for venture capital, where institutional investor interest peaked in 2021, about a year before the US Federal Reserve took the wind out of the asset class’ sails with the first of a series of interest rate hikes. The lastest sign: New York’s Tiger Global raised just USD 2.2 bn for its sixteenth fund. It had aimed to raise USD 6 bn for the fund when it started lining up commitments from limited partners in late 2022.

AND- Carmakers and industry analysts are worrying that the global slowdown in demand for electric vehicles could be more than a blip. “If prices do not fall, or legitimate [consumer] concerns over charging infrastructure are not met, motorists may resist indefinitely. The implications of the second are potentially concerning. Meeting long-term decarbonisation targets without removing all petrol and diesel cars from the roads is impossible,” notes the Financial Times’ Peter Campbell in an Insider Business column. Will politicians look to use other levers to stimulate demand, from higher fuel prices to sharp taxes on petrol-powered cars?

THE MARKETS THIS MORNING-

Major Asian benchmarks are in the green in early trading this morning, with the Hang Seng leading gainers in Hong Kong’s Hang Seng. The smartphone maker wowed fans and critics alike with the launch of SU7 EV, selling out its full 2024 production run in less than two days. European stock futures are slightly this morning and US futures are in the red.

THE CLOSING BELL-

The DFM rose 0.4% yesterday on turnover of AED 471.9 mn. The index is up 5.9% YTD.

In the green: Union Properties (+8.1%), Deyaar Development (+2.9%) and Watania International Holding (+2.6%).

In the red: Al Salam Sudan (-10.0%), Al Mal Capital REIT (-8.5%) and Tecom Group (-2.2%).

Over on the ADX, the index closed up 0.2% on turnover of AED 910.6 mn, while Nasdaq Dubai rose 0.5%.

CORPORATE ACTIONS-

#1- Drake & Scull secured shareholder approval for its restructuring plan to increase share capital by up to AED 600 mn through issuing 2.4 bn new shares at a reduced price of AED 0.75 apiece, according to a DFM disclosure (pdf) from yesterday. The capital increase will raise the Dubai-based contractor’s total share capital to AED 3.5 bn. Shareholders also greenlit the company plan to issue a five-year AED 600 mn mandatory convertible sukuk, with each certificate valued at a minimum of AED 5k.

ICYMI-The construction company was suspended from trading in November 2018 on the back of excessive financial losses and reporting violations. The Dubai Financial Market approved Drake & Skull’s restructuring plan — which will write off 90% of its debt — back in November 2023, and its relisting in March after the firm revealed plans for an AED 300 mn capital increase.

#2- Union Properties has paid off some AED 290 mn of its debt in 1Q 2024 as part of its debt restructuring plan, with another AED 250 mn in repayments planned for 2Q 2024, the real estate developer said in a DFM disclosure (pdf). The company recorded AED 816 mn in sales during the quarter.

ICYMI-The developer of Dubai’s Motor City saw its net income rise over 2000% in 2023 as it doubles down on cost efficiency and debt restructuring, following years of losses prompted by the 2009 property market crash. The developer reached AED 1.2 bn settlement agreements with Dubailand and Emirates NBD in February, marking a turning point in a long-standing legal dispute that will allow it to repurpose some of its dormant land and allowing it to restructure some of its debt.