Trump Suffers Huge Setback as Media Stock Crashes After Massive Fraud Revelation
According to a report by Forbes on Monday, June 10, 2024, Trump Media submitted an updated financial inspection conducted by a newly hired public accounting firm on Monday, following the indictment of its previous auditor by the U.S. Securities and Exchange Commission (SEC).
The stock of Trump Media, which trades under the ticker DJT on the Nasdaq, plummeted by more than 5% at the close of the trading day. The company, primarily owned by former President Donald Trump, detailed the changes in a revised registration statement.
This new submission included a re-audit performed by Semple, Marchal & Cooper, LLP, based in Phoenix, Arizona. “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,” said Trump Media CEO Devin Nunes in a press release.
The shift to Semple, Marchal & Cooper, LLP came in early May, shortly after the SEC charged the company’s former auditor, BF Borgers CPA, with “massive fraud.” The SEC’s allegations against BF Borgers, announced just three days before Trump Media’s auditor change, accused the firm of running a “sham audit mill” that compromised over 1,500 filings by failing to adhere to standard auditing practices.
BF Borgers and its owner, Benjamin Borgers, have agreed to pay $14 million in civil penalties and face permanent bans from auditing public companies. Despite the immediate negative impact on its stock price, Trump Media maintains a market capitalization nearing $7.5 billion.
However, critics argue that this valuation is vastly inflated compared to the modest revenue the company has reported. The skepticism is fueled by the underwhelming performance of Trump Media’s sole product, Truth Social.
Data indicates that Truth Social is struggling to retain its user base, generating only a fraction of the traffic seen by major social media platforms like X (formerly Twitter) and Facebook.
The SEC’s actions and the resultant auditor switch underscore the ongoing regulatory challenges Trump Media faces as it navigates the complexities of financial compliance and public scrutiny.
