A smartphone displays the logo of Donald Trump’s Truth Social app on March 25, 2024.
Anna Barclay | Getty Images
Trump Media on Monday submitted an updated inspection of the company’s finances by a newly hired public accounting firm, after its last auditor was charged with fraud by the U.S. Securities and Exchange Commission.
Shares of Trump Media initially dropped more than 7% on Monday’s announcement. The stock was down about 6% as of 1:00 p.m. ET.
The media company, which is majority-owned by former President Donald Trump and trades as DJT on the Nasdaq, said its revised registration statement includes a reaudit conducted by the Phoenix, Arizona-based firm Semple, Marchal & Cooper, LLP.
The company behind the social media platform Truth Social said in a press release that its latest filing amends a registration statement from mid-April and is not offering any new shares.
“I want to thank SMC for serving as our independent auditor and enabling us to file an Amended Registration Statement, which we hope the SEC will promptly review,” Trump Media CEO Devin Nunes said in the press release.
Trump Media hired Semple, Marchal & Cooper, LLP in early May, replacing its prior auditor, BF Borgers CPA. Three days before Trump Media announced that switch, the SEC charged BF Borgers with “massive fraud” that affected more than 1,500 filings.
The federal regulatory agency accused the “sham audit mill” of failing to comply with established auditing standards and falsely representing to clients that their work would meet those standards.
The SEC said BF Borgers and its owner, Benjamin Borgers, agreed to pay a combined $14 million in civil penalties and submit to permanent bans from auditing public companies.
Despite Monday’s stock drop, Trump Media boasts a nearly $7.5 billion market capitalization, which critics say is wildly disproportionate to the small amount of revenue the company has reported earning.
Data shows that the company’s sole product, Truth Social, appears to be struggling to hold on to its user base, which already generates just a tiny fraction of the traffic enjoyed by established social media giants such as X and Facebook.