Truth Social shares go into freefall after investors learn how much money it really makes

Investors on Monday got their first peek at the financials of the Trump Media & Technology Group, the owner of the Truth Social platform — and they did not like what they saw.

Shares in the firm plummeted by more than 15 percent in the hours after it released its financial statement, thus shaving billions of dollars off its market cap.

As of noon on Monday, the shares were trading in the $51 range, after having closed at just under $62 the previous trading day.

As Forbes reports, this development has taken an axe to former President Donald Trump's personal stake in the firm, which some observers speculated he would use to help pay off his considerable legal bills.

"Trump, who owns 78.5 million shares in Trump Media, about 57% of all outstanding shares, accordingly had his stake in the social media venture slide from its peak of $6.25 billion to Monday’s $4.25 billion," the publication writes.

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Given that Trump Media reported a net loss of $58 million last year on revenues of just over $4 million, the firm's current price-earnings ratio is in negative territory, which suggests that the stock could fall even further unless dedicated fans of the former president rush in to help keep its price high.

Added to this, Forbes writes that "Trump Media’s 1,470 price-to-sales ratio, which compares a company’s total valuation to its last 12-month sales, is exponentially higher than social media peers Reddit and Snap’s respective 9 and 4 price-to-sales ratios."

It's always possible that the firm could generate more revenue, but it is unclear at this point what a strategy to make money from Truth Social would entail given its low core user base and lack of success in attracting major advertisers to spend money there.