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Trump's social media company discloses inquiry from FINRA

May 20, 2024 4:48 PM EDT

FILE PHOTO: The Nasdaq Market site is seen on the day that shares of Truth Social and Trump Media & Technology Group start trading under the ticker "DJT", in New York City, U.S., March 26, 2024. REUTERS/Shannon Stapleton/File Photo

(Reuters) -The owner of Donald Trump's social media company Truth Social said on Monday it had cooperated with an inquiry from the Financial Industry Regulatory Authority (FINRA) tied to its blank-check merger.

The inquiry from FINRA, Wall Street's self-regulator, was primarily related to trading prior to the announcement of the deal with Digital World Acquisition Corp, and should not be viewed as an indication of wrongdoing, Trump Media and Technology Group (TMTG) said.

TMTG has been on a roller-coaster ride since going public. An army of Trump supporters and speculators snapped up its shares, sending them soaring as much as 59% in their Nasdaq debut on March 26, but the stock has since reversed those gains, leaving the company with a market value of almost $7 billion.

Former president Trump, who is running as the Republican candidate in the Nov. 5 presidential election, holds a majority stake in TMTG. He is a prolific user of Truth Social, which has sought to project itself as a safe haven for free speech.

TMTG had delayed its quarterly report last week after dismissing its auditor, BF Borgers, which the Securities and Exchange Commission charged with "massive fraud" earlier this month.

The company reported its earnings earlier on Monday, disclosing a wider loss in the first quarter due to certain non-cash expenses it incurred prior to closing its merger.

Net loss for the three months ended March 31 was $327.6 million compared to $210,300 the year before.

The vast bulk of "merger-related expenses" were dispensed with, TMTG CEO Devin Nunes said in a statement.

A vast majority of the company's 621,000 shareholders are retail investors, as of April 29, the company said.

(Reporting by Niket Nishant in Bengaluru; Editing by Alan Barona)



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