Trump Media faces legal challenge over Truth API as shares tumble
The Intercept and Freedom of the Press Foundation argue the $100,000-a-month service grants wealthy investors an unfair advantage, compounding financial concerns for Trump Media & Technology Group.
Trump Media & Technology Group (TMTG) is facing a federal lawsuit challenging its Truth API service, which sells expedited access to President Donald Trump’s Truth Social posts for up to $100,000 a month. The legal action, filed by The Intercept and the Freedom of the Press Foundation in U.S. District Court in Manhattan, alleges the arrangement violates the First and Fifth Amendments by creating an unfair advantage for wealthy investors and trading firms.
The complaint describes the subscription model as “extraordinary, corrupt, and unconstitutional,” arguing there is no legitimate interest in allowing the president to profit from selling government information. Plaintiffs contend that Trump’s posts often serve as the immediate source of official government news, lacking corresponding White House announcements, which makes paid early access to these updates particularly consequential for market participants.
The market reaction was immediate, with DJT shares plunging 7.2 per cent on 12 August following the lawsuit filing. This decline follows a second-quarter fiscal 2026 earnings report released on 10 August, which revealed a $238.1 million net loss despite an 89 per cent increase in revenue. The stock has now fallen 54.31 per cent over the past year and is down 38 per cent so far in 2026, trading in the single digits after a 52-week high of $18.97 in August 2025.
TMTG reported $1.7 million in revenue for the quarter, a significant jump from the previous year, driven by advertising services, Truth+ streaming subscriptions, and management fees from Truth.Fi exchange-traded fund offerings. However, this growth was overshadowed by the net loss, which included $190.4 million in unrealised losses on digital assets and equity securities. Cash used in operating activities totalled $13.7 million, including $25.6 million in legal expenses related to legacy litigation.
Despite the losses, the company ended the quarter with $2 billion in total assets, approximately $1.9 billion of which consisted of financial assets. The Truth API service, launched in August, has already attracted more than 10 customers, including financial firms, positioning it as a potential recurring revenue stream. However, the legal uncertainty surrounding the service, combined with the company’s weak financial fundamentals, continues to weigh heavily on investor sentiment.
