There are a few causes.

Let's review first: Trump Media and Technology Group (TMTG) recently combined with Digital World Acquisition Corp. in a SPAC, the infamous financial vehicle that usually serves as a last-ditch attempt to get a substantial influx of capital. The NASDAQ trades the corporation under the well-known symbol $DJT.

Making your finances publicly available to the public is a crucial component of going public, and TMTG just submitted its first quarterly financial report to the SEC, which is available for public viewing and analysis. Though the financial press is having a field day, TMTG is ultimately losing a lot of money and producing very little. In particular, the business lost $58 million on revenue of just $4 million.

Regardless of the "mission" or leadership of a digital startup taking on established competitors, those with philanthropic tendencies may well note that this disparity is typical of early-stage firms with lofty goals. And that's exactly it—who can forget that Uber ran at steep losses for years in order to threaten the viability of the taxi industry's business model?

On the surface, TMTG seems comparable, mostly because it is a non-profit organization. However, that does not indicate that it is a startup experiencing rapid expansion. There are three main, obvious reasons for this:

• TMTG is not expanding. TMTG's primary venture, Truth Social, has not been able to draw in more than a few million members. As others have noted, Twitter had $665 million in annual sales when it went public. It hasn't shown the type of traction any company would need to exhibit to claim that it's the next great thing, or really anything at all. The glaringly low revenue figures indicate that its sole source of revenue, advertisers, are unwilling to cover the cost of the existing audience. There's also no good reason to think that this will alter.

• There is no VC runway at TMTG. Fundamentally unsuccessful enterprises are supported with venture capital, a high-risk, high-reward approach, until they can turn a profit. This allows entrepreneurs to take chances, such as hiring too many people, charging too little, and pushing the "business model" can farther down the road—possibly indefinitely. Investors will throw billions into a project if they are confident in it and it has traction, similar to Uber, since they know they will eventually get their money back. But even for a VC, Trump would be a hazardous play given his present perilous situation. But none of that matters because:

• Presently, TMTG is answerable to its investors. While small startups are subject to periodic reporting requirements from their venture capital masters, they have greater autonomy than publicly traded corporations that are obligated to their shareholders. Despite the fact that Trump holds 60% of the company's shares, the remaining 40% are keeping a careful eye out for any violations of this obligation, such as share fire sales or loans that materially undervalue the business. The crucial point to remember in this situation is that TMTG isn't free to take chances and fling money around—they don't have any anyhow. Going public is based on the fundamental tenet that your company is one that investors would want to invest in. TMTG doesn't.

As a result, $DJT is fundamentally and drastically overpriced, as the experts have previously noted. It seems improbable that the firm will turn a profit anytime soon, much less one large enough to support the share price and multibillion-dollar value. Even the most optimistic projections most likely see solvency as a distant objective.

However, there is a very real chance that everything may fall apart before the year is up due to the majority owner's personal, political, legal, and commercial issues.