Donald Trump's new public social media company Not the next Nvidia – or Meta or Google or whatever happened with X/Twitter.
The stock price of Trump Media and Technology Group, which trades under the stock ticker DJT (because of course it is), has soared following the completion of its SPAC merger last week. A SPAC, or special purpose acquisition company, is a shell company — in this case, Digital World Acquisition — that goes public with the goal of later purchasing an actual company. For a while, TMTG's market cap was in the $9 billion range, making it more valuable than Etsy and Hasbro. This brought the former president's net worth to $7 billion, but not in a way that he could benefit from it immediately. Unless the company's board of directors decides otherwise, Trump cannot sell his shares for six months.
But if I were Trump, I would convince the board to speed up the shutdown so I could benefit from it. It seems, for example, unlikely that his media company's share price will remain this high forever.
For one thing, TMTG, which owns the conservative Twitter copycat Truth Social, is basically doing nothing. Its revenue totaled $3.4 million in the first nine months of 2023. Extrapolating that, the stock is likely trading at 2,000 times the company's annual revenue. That is, um, high. For example, Apple trades at about seven times its total revenue. Considering TMTG's meager revenues, it actually lost $49 million in the same period.
Trump Company He says It has bigger plans in the future, such as developing Truth Social and developing “one or more cutting-edge additional products and/or services” to complement Truth, including some sort of video streaming situation that “provides a 'home' for canceled content creators.” “It's not clear what exactly this might look like, or how many people will flock to it.
Social truth He could 5 million monthly website visits in February of this year, according to third-party trackers, but the company is not disclosing exact metrics at this time. By comparison, Facebook had 845 million monthly active users when it went public in 2012, and Twitter had 215 million when it went public the following year. The long and short of it is that TMTG is not a thriving company.
But other social media, designed to appeal to the broadest possible base, may not be the right comparison. Truth Social and any other company run by the Trump Media and Technology Group are pretty much guaranteed to attract only Trump fans.
Trump's media company is not the first conservative company to go public via SPAC in recent years He tried to make money from right-leaning consumers and investors. Her predecessors weren't so hot. Rumble, a YouTube powered by Peter Thiel for the right, increased by about 40% on its first day of trading in September 2022, and it has remained well below that since then. Black Rifle Coffee, a Republican Starbucks, and Public Square, the supposed GOP alternative to Amazon, have followed similar trajectories: Shares rose early, then have remained below $10 since. None of them have achieved sustained profitability, although Black Rifle says it is on track to do so.
I think Trump's odds of winning the White House (or ending up with some criminal convictions) are much better than the odds of his modest social media company succeeding.
The anti-wake business is not particularly lucrative. As much as people say they want to shop and invest their values, that's often not the case. Instead, most people choose the convenient option and whatever they're already used to doing. There's a reason most boycotts don't work: people are busy and tired. This is true on the left as well. Dig deep enough, and probably every company in the world can give you a reason why you don't want to give them your money.
Could Trump and social truth be any different, at least on the stocks front? I mean, I think anything is possible. As my colleague Peter Kafka points out, investors aren't selling stocks en masse yet, partly because doing so is difficult and partly because you can see DJT taking off with the meme stock crowd. GameStop and AMC didn't do particularly great commercially when they achieved meme status, yet small investors were eager to cash in on them. For much of the country, pumping some money into Trump's company is not just a way to stick it to The Man, but also to The Woke Man. Trump has also spent years insisting that his literal name is worth a lot of money, and I think we're about to find out just how much.
However, I think the odds of Trump winning the White House (or ending up with some criminal convictions) are much better than seeing his modest social media company take off. He might want to call up one of the TMTG board members — say, his son Don Jr. — and make sure there's a meeting on the books to allow him to start unloading stock sooner rather than later.
Emily Stewart He is a senior correspondent for Business Insider, writing about business and economics.
“Devoted student. Bacon advocate. Beer scholar. Troublemaker. Falls down a lot. Typical coffee enthusiast.”