Donald Trump defended his social media platform Truth Social on Thursday as a growing number of critics – and short sellers – view the parent company as a meme stock with a wildly inflated share price.
In two lengthy posts on Truth Social, Trump accused the platform’s critics of being “radical left-wing Democrats” trying to convince others “that TRUTH isn’t that big of a deal and doesn’t spread that well.” others that they know to be false.
“I FIND THE TRUTH AMAZING!” Trump wrote, echoing a statement from Devin Nunes, CEO of the app’s parent company, earlier this week: Trump Media & Technology Groupthat it has “no debt and over $200 million in the bank.”
“More importantly, it is the most important way I can get my message out and, for better or worse, people want to hear what I have to say,” Trump wrote.
The platform is not only a mouthpiece for the presumptive Republican presidential nominee, but also Trump’s path to potentially massive financial gain.
Trump owns 78.8 million shares of the company, a 57.3% stake worth more than $3.6 billion, with the company’s share price at $46 as of Thursday morning. Trump must wait for a six-month lock-up period to expire before he can sell shares.
However, it’s far from clear how the volatile stock will fare over this period, and Trump Media’s long-term business plan has spurred plenty of skeptics.
According to data firm S3 Partners, Trump Media is by far the most expensive stock to short in the United States. The annual financing cost required to borrow DJT shares to short sell ranged from 750% to 900% of the share price as of Wednesday, S3 reported.
The company, which trades under the ticker DJT after completing a lengthy public merger, shot up as much as 50% in its Nasdaq debut last week. But on Monday, the stock plunged 21% after the company reported a net loss of $58.2 million on revenue of just $4.1 million in 2023.
DJT fell more than 5% as of 10:30 a.m. ET on Thursday. Nevertheless, the company had a market capitalization of around $6.2 billion.
The company’s cachet is inextricably linked to the status and continued relevance of Trump, its founder and its public face. Trump even seemed to identify himself as the main attraction at Truth Social on Thursday morning.
But the former president faces several political, legal and financial challenges that could weaken his standing as a public figure and, in turn, undermine the value of Trump Media.
Meanwhile, the company said in a recent regulatory filing that it does not disclose key performance indicators — such as signups, average revenue per user, ad impressions or active user accounts — because these metrics could distract the company and “may not be consistent with its.” Long term goals.
Trump Media said it may change its mind at some point and report this data, but it also will “never collect, monitor or report any or particular key operating metrics.”
In his own posts, Trump confirmed that his following on Truth Social has declined significantly compared to the ones he once had on much larger rival platforms like X, where he had more than 87 million followers.
This company and others banned Trump following the insurrection at the Capitol on January 6, 2021 by a violent mob of his supporters, after months of Trump using social media to spread false claims of election fraud. X restored Trump’s account afterward Tesla CEO Elon Musk bought the company, but Trump has not resumed regular tweeting.
Trump said his roughly 7 million followers on Truth Social are “very good for a startup and growing quickly.”
Truth Social received about 5 million visits in February, according to an estimate from research firm Similarweb reported by the Associated Press. In comparison, Facebook reported more than 3 billion monthly active users at the end of 2023.
If the platform didn’t work, he added: “I wouldn’t be using it – but it works, and works really well – and the fun is just beginning!!!”
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2024-04-04 15:30:25
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