Think Truth Social can save Donald Trump’s money problems – Dagsavisen

The share price of Donald Trump’s media company Truth Social has fallen since last week’s top listing on the Nasdaq stock exchange. But the company is still worth more than 7 billion US dollars at today’s exchange rate – an astonishing sum considering the business behind it, writes the BBC.

New York Magazine has previously referred to Truth Social as a total failure.

– From the very beginning, the website has struggled to attract users; even Trump’s children barely log on to support their aging, indicted father, the magazine’s reporter Matt Stieb wrote last year, predicting a short life for Truth Social. But now the magazine still speculates whether share sales could become Donald Trump’s financial lifeline.

The Apprentice

The Trump Media & Technology Group was founded in 2021 after Trump lost the presidential election and was temporarily banned from major social media platforms, including X, then Twitter, and Facebook, which accused him of inciting violence. The idea to create the social network Truth Social came from two former participants in Trump’s reality TV show “The Apprentice”, who saw an opportunity to create an alternative to the usual social media with their own channel.

Much of the functionality in Truth Social is identical to X. According to the BBC, users can post “truths” or “falsehoods” and send instant messages. Advertisements are called “sponsored truths”.

According to Trump Media, they claim that around 9 million Truth Social accounts have been created since its inception. The company does not state how many users it has, but analytics firm SimilarWeb estimates that Truth Social had 5 million monthly visits to its site in February this year.

In comparison, TikTok had more than 2 billion visits, while Facebook had more than 3 billion. X had 104 million visits in February, according to SimilarWeb. Trump himself has about 7 million followers on Truth Social, far fewer than the 87 million he has on X. The former president’s X account was reinstated in late 2022, but he has only posted once since then.

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Loses money

According to the BBC, Trump Media lost almost 60 million US dollars (over 640 million Norwegian kroner) in 2023, while they only received around 4 million dollars (42 million kroner) in advertising revenue, according to the latest financial update. It also warned of significant doubt about the company’s ability to continue as a going concern. The report was a reminder of the large gap between the company’s finances and the share price, which values ​​the company at around $7 billion (NOK 75 billion).

Trump’s relationship with the company can be compared to the licensing agreements he used in his real estate empire, where he left his name to a business primarily run by others. He has also agreed to post non-political messages first on Truth Social.

The owner side

Trump Media, which is headed by former Republican congressman Devin Nunes, was originally a private company in which Trump owned 90 percent. The company was listed on the stock exchange in March 2024 through a so-called SPAC transaction – that is, it was acquired by a company that was already listed on the stock exchange, in this case Digital World Acquisition Corp.

On March 24, Trump filed a lawsuit against two of the founders of Trump Media & Technology Group, the recently disclosed owner of his Truth Social platform, alleging that they will lose their shares in the company after they allegedly wrongfully created it .

Trump himself, according to NBC, is prevented from selling his shares for about six months, unless the company gives him a waiver. But if he decides to sell the shares, whose price has fluctuated wildly since 2012, he could make big money – even if the price falls sharply, as many analysts predict.

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