Investors waiting for an update of how Donald Trump's media startup is faring will have to wait a bit longer — months by some accounts — before getting a look at financial results.
That's because the Securities and Exchange Commission moved to
Trump Media listed BF Borgers as lead independent auditor in a filing dated April 17. BF Borgers didn't immediately respond to a request for comment.
Under SEC rules, publicly listed companies have 45 days from the end of a quarter to file audited financial reports, giving Trump Media until May 15. The SEC reminded companies impacted by the auditing firm's fallout that they can file for "a limited extension of the deadline," which would include first-quarter results for Trump Media.
The social-media company's report "will definitely be delayed," says Usha Rodrigues, a law professor at the University of Georgia and an expert on blank-check companies, like the one that brought Trump Media to the market. It will take 30 days "at the very least" to see the results, she said, though she saw a 60- to 90-day wait as more likely.
Jay Ritter, professor of finance at the University of Florida, thinks it may take "several months before the audited first quarter numbers are available."
The special-purpose acquisition company that Trump Media merged with to go public, Digital World Acquisition Corp., had its own auditing issues in the lead up to the deal's completion. By August, the SPAC's auditor Marcum LLP — which was riddled with regulatory problems of its own — had abruptly resigned.
Trump Media's new auditor will likely take time to perform diligence and get up to speed with already-public filings, industry watchers agreed. "We will see either a slow, reputable accounting firm or one risk-comfortable enough to take on a high-risk client," University of Georgia's Rodrigues said.
The media company will likely file a regulatory update within days to confirm that it doesn't currently have an auditor and will be looking to hire a replacement. Trump Media "looks forward to working with new auditing partners in accordance with today's SEC order," a representative for the company said.
The regulator's settlement with BF Borgers didn't specify whether Trump Media was one of the companies whose filings involved alleged fraud by the accounting firm.
Trump Media has used the Colorado-based accounting firm since 2022, and retained its services after it went public by merging with Digital World Acquisitions. Inspections by the Public Company Accounting Oversight Board haven't yet covered BF Borgers' audits of Trump Media.
Trump Media's lofty valuation, worth some $8.2 billion, has drawn skepticism from investors given the company reported just $4.1 million in revenue last year and lost more than $50 million. The stock remains one of the most expensive in the market to bet against with short sellers facing annual financing costs above 600% — meaning contrarians need the shares to decline just to not lose money.
Despite the disconnect between its fundamentals and valuation, the company has attracted retail traders and Wall Street professionals alike with wild swings drawing comparisons to the meme stock mania of 2021.
