Trump’s Truth Social is now a public company. Experts warn its multibillion-dollar valuation defies logic | CNN Business
Trump’s Truth Social is now a public company. Experts warn its multibillion-dollar valuation defies logic | CNN Business
For the first time in almost 30 years, part of Donald Trump’s business empire has gone public. Trading started with a bang.
Trump Media & Technology Group, the owner of struggling social media platform Truth Social, is began its long-delayed journey as a public company at Tuesday’s opening bell under the ticker symbol “DJT.”
The stock surged about 56% at the open, to $78, and trading was briefly halted for volatility. Trump Media shares have since stabilized at around $70, marking a 40% increase from Monday’s close.
Wall Street is assigning Trump Media an eye-popping valuation of around $13 billion — a price tag that experts warn is untethered to reality.
The skyrocketing share price comes despite the fact that Trump Media is burning through cash; piling up losses; and its main product, Truth Social, is losing users.
“This is a very unusual situation. The stock is pretty much divorced from fundamentals,” said Jay Ritter, a finance professor at the University of Florida’s Warrington College of Business, who has been studying initial public offerings (IPOs) for over 40 years.
Trump hit with huge fine he can't pay -> Rumors of Trump trying to raise money from foreign governments -> Lawyers push back, say 'you can't just accept half a billion from foreigners to pay the fine, there are rules!' -> Truth Social IPO raises a bunch of money that (foreign) investors are willing to 'loose' when the stock inevitably collapses -> Trump puts up the stock as collateral to pay the bond to pay the fine.
What? He can't sell his stock for 6 months? No, he isn't selling it, he is putting it up for collateral, totally legal, totally won't be investigated by the SEC until he gets elected and fires the head of the SEC and the lawsuit goes away.
Revenue of $ 3.4 million should put it around a $ 34 million value, provided it had normal profit. But it operates at a deficit, and AFAIK a not impressive growth rate. So a more normal estimate would probably put the company about $ 20-25 million.
The talk about billions is ridiculous to a degree where it's either insane, or some sort of scheme exist to pump it to hundreds of times the actual value.
It almost sounds like an in-power group of people who have a vested interest in other in-power people being able to leverage "value" of an asset to get out of trouble to then help the first group are artificially inflating the "value" of something they set.
Twitter is valued at around $19B by Musk himself, and it has around 300 million users. Truth has 500,000 users. They have 1/600th the users and are valued at 2/3rd. They only generated $5M in revenue while losing $50M in costs. Twitter had roughly 200 times higher revenue, yet only 50% higher value. It's insane how obviously wrong the valuation is. And the thing is, sometimes tech companies have seemingly high valuations when losing money but are still worth it because of the potential for growth... but where is the growth coming from for Truth? Ain't nobody jumping from Twitter for Truth that hasn't already. It's not like there's a huge boom of conservatives coming our way. If anything, Truth's current trend of losing users will only continue with Threads coming online and other social media outlets.
You can now sell out your country on the NASDAQ. Now that's an efficient market.
I’m assuming they see massive market potential for running penis pill and gun ads on it?
"This is a very unusual situation. The stock's value is pretty much divorced from truth"
Had to fix the sentence to what he likely meant to say.
Only until you realize that embezzlement is very logical
Let the laundry begin!
Sigh… I buy index funds that own the whole market…
GameStop part II?