Truth Social doubles Trump’s wealth overnight

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Donald Trump, the 45th President of the United States and real estate mogul, has reportedly seen his net worth double overnight, after taking his social media platform public. Truth Social – which was Trump’s answer to being banned from mainstream platforms in 2021, promises users that it “[E]ncourages an open, free, and honest global conversation without discriminating on the basis of political ideology.” 

Compared with the big players in the social media space, such as Twitter and Facebook, Truth remains a niche product. Citing the SimilarWeb analytics service, Axios reports that Truth has just five million monthly active users as of February 2024, compared to 845 million across Meta platforms. In a January filing Truth said it had 9 million sign-ups to the service across all platforms. 

It was against this backdrop that some analysts were left surprised when on March 26, the firm behind Truth Social went public on the Nasdaq and reached an $8 billion valuation. Trump, who owns a reported 60 per cent stake in parent company Trump Media & Technology, saw his wealth soar from an estimated £2.3 billion to more than $6 billion, becoming the 412th richest person in the world according to Forbes

The furore around the upstart social media platform has left some asking, what is Truth Social – and is it a good investment? 

What is Truth Social? 

Described as an ‘alt-tech’ social media platform, Truth Social was launched by Donald Trump after being removed from mainstream social media platforms in 2021. It pitches itself as a space for users from across the political spectrum to express their views without fear of being silenced or suppressed. 

Truth has been compared to X, formerly Twitter, and has even been described as a Twitter clone. Trump was famously an early adopter of Twitter, and his Truth Social service would feel familiar to anyone who has used the social network. Truth users can post their thoughts and repost those of other users, similar to Tweeting and Re-Tweeting.

Truth Social’s parent company has recently set out its ambition to expand into the online video space to provide what it bills as a “non-woke streaming service”, as per Newsweek. The subscription service is set to feature entertainment, podcasts and news and would see the platform join a growing number of challengers to YouTube, such as Rumble, to fight for a share of the online video market. 

Truth Social has not escaped controversy, after being initially denied access to Google’s Play store over what the company said were concerns around incitement to violence on the platform. However, the decision was later reversed after Google said Truth Social agreed to comply with its platform moderation policies, with Truth going on to be downloaded more than one million times from the Play Store. 

While for the time being Truth shows few signs of mounting a serious challenge to Silicon Valley, it appears to have quickly overtaken some rival alt-tech platforms. In research carried out by Pew in 2022, it was found that 27 per cent of Americans had heard of the service – beating most other similar outsider apps – and that two per cent of the population used the service to access the news.

While there isn’t much reliable contemporaneous data, it would be reasonable to assume that the platform’s recent entry into the stock market and the associated headlines would have given it a big publicity boost, and with that, some increase in users. 

Is Truth Social overpriced?  

Trump Media and Technology, trading as DJT on the Nasdaq, reached $8 billion in its public offering, reportedly netting Donald Trump a $4.6 billion boost. But as ever, Truth is not far from controversy, and its latest move is no exception. 

As per CNN, Truth stock surged by 56 per cent at the open, before ending 16 per cent up on the day by the closing bell. However, speaking to the outlet, Jay Ritter of the University of Florida said the price ‘defied expectations.’ He said: 

“This is a very unusual situation. The stock is pretty much divorced from fundamentals,”

Ritter went on to ‘confidently predict’ Truth stock could fall to as low as $2 a share, accusing the business of ‘not being worth much.’

Bloomberg reports that Trump Media and Technology is now valued at 2,000 times its annual revenue – as against 38 times revenue for Nvidia stock – and branded the social media site a “meme stock.”

However, not every outlook is quite so gloomy. Speaking to the New York Post, Ihor Dusaniwsky of S3 Partners said “[L]ong shareholders have a much different and much more positive view on DJT\DWAC’s stock price,”

Matthew Kennedy, of Renaissance Capital, said the valuation effectively reflected a bet on Trump returning to the White House at the next general election, telling CNN: 

“If he wins in November, Truth Social will probably be the primary means of presidential communication…That’s the bet here.”

That view was echoed by Jordan Libowitz in comments to, who said “It’s not really Truth Social, they’re investing in a potential future president of the United States,” in what has been described as an attractive prospect for ‘high risk, high-reward speculators.’ 

Although the public offering has seen Trump’s wealth soar, a ‘lockup’ provision may prevent the former president from cashing out anytime soon. Trump is prevented from selling or borrowing against his shares for around six months, meaning that for him to turn the stock’s value into liquid, it would have to hold up for an extended period. Dan Alexander, senior editor at Forbes, explained the arrangement to PBS: 

“He [Trump] has lockup provisions as part of this deal, which prevent him from either selling or borrowing against those shares for roughly six months. Now, maybe something happens where they can tweak the rules, but, in doing so, they would essentially be inviting shareholder lawsuits. And I think it would be difficult for them to be able to change it.”

What is a meme stock? 

A meme stock is a stock whose value is largely influenced by internet memes, social media buzz, and online communities rather than traditional financial metrics. The term gained prominence during the GameStop (GME) saga in early 2021, where users on the Reddit forum r/WallStreetBets coordinated a massive buying campaign, causing the stock’s price to skyrocket. This phenomenon highlighted the power of online communities to influence stock prices and challenge established norms in financial markets.

Historically, GameStop was a struggling brick-and-mortar retailer facing challenges from digital downloads and online competition. Its fundamental financial performance did not justify the massive surge in its stock price.

However, a narrative emerged on social media platforms, particularly Reddit, where users rallied behind the idea of “taking down” institutional investors and hedge funds that had heavily shorted the stock. Through memes, jokes, and fervent discussions, retail investors banded together to drive up GameStop’s share price, causing a short squeeze and resulting in significant losses for institutional short sellers.

The GameStop saga showcased the power of collective action and social media influence in shaping market dynamics. It also highlighted the disconnect between stock prices and fundamental valuations, with GameStop’s price surge driven more by sentiment and speculation than by traditional financial analysis. So, while Truth Social may be valued as high as 2000 times its revenue, its price might be reflecting sentiment and enthusiasm.

Similar to GameStop, the valuation of Truth Social might be influenced more by sentiment, speculation, and supporters of Donald Trump rather than traditional financial metrics. Trump’s loyal base of supporters could drive hype and enthusiasm for the platform, leading to inflated expectations and valuations in a similar way to fans of GameStop boosting the stock’s price in the face of tough times for the business.

Analysts might consider Truth Social’s valuation as resembling that of a meme stock for several reasons:

  1. Social Media Buzz: Like meme stocks, Truth Social’s valuation could be influenced by social media buzz, discussions, and online communities. Trump’s supporters might generate excitement and anticipation for the platform through memes, tweets, and online engagement.
  2. Speculative Nature: Meme stocks are often characterized by speculative trading activity rather than rational investment decisions based on fundamentals. Similarly, investors’ interest in Truth Social could be driven more by speculation about its potential success and impact – namely whether Donald Trump wins the November election, rather than a thorough analysis of its business model and revenue prospects.
  3. Disconnect from Fundamentals: Truth Social’s valuation might not necessarily reflect its actual financial performance or revenue-generating potential. Instead, it could be inflated by the perception of Trump’s involvement and the platform’s ability to attract a dedicated user base.

Who owns Trump Media? 

Trump Media & Technology Group was founded in 2021 by Donald Trump. Trump reportedly retains 60 per cent of the firm’s shares. It became a public company in March 2024 after a merger with Digital World Acquisition Corp. 

While Trump remains a majority shareholder, he appears to have disposed of some shares, having formally held 90 per cent of the company’s stock. 

TMTG was set up with investment from Shanghai-based firm ARC Capital – and by 2021 claimed to have raised more than $1 billion in investment from undisclosed investors.

Will Truth Social succeed? 

Despite Truth Social’s comparatively modest user base vis-à-vis industry titans such as Twitter and Facebook, Trump Media & Technology, the parent entity behind Truth Social, attained a staggering $8 billion valuation upon its Nasdaq listing, returning its owner, Donald Trump, to the Forbes’ rich list.  

However, the valuation of the stock has sparked robust discourse among financial pundits, drawing parallels between Truth Social and the phenomenon of meme stocks exemplified by GameStop. Characterized by speculative fervour and detached valuations, meme stocks serve as bellwethers of market exuberance and the potency of social media-driven investment trends. Truth Social’s valuation, soaring to 2000 times its annual revenue, has been characterised by some analysts as a bubble.

Notwithstanding these reservations, some investors are more sanguine regarding Truth Social’s prospects, conceiving it as a calculated wager on Trump’s prospective political resurgence and the platform’s role as a conduit for political communication. This sentiment underscores the relationship between Truth Social’s valuation and broader political dynamics, accentuating the platform’s distinctive position at the confluence of technology, finance, and political discourse.

Yet, amidst the fervour surrounding Truth Social’s public offering, judicious investors exercise circumspection, cognizant of the speculative nature of the platform and the attendant risks associated with its lofty valuation. Whether Truth Social will succeed in the long run, or become fated to be a transient phenomenon propelled by hype and speculation remains a subject of conjecture. Nonetheless, its impact on financial markets underscores the burgeoning influence of social media in shaping investment paradigms and market dynamics.


Mario Laghos​

Mario Laghos is a journalist. His work has appeared in the Critic magazine, the Daily Express, and the Daily Mail

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