- Trump’s social media venture, Truth Social, is set to trade on Nasdaq under the ticker symbol “DJT” following a merger with Digital World Acquisition Corp.
- Despite financial challenges and a small user base, the company holds a valuation of around $5.5 billion, with Trump’s stake estimated at $3 billion.
- The success of Truth Social relies on growing its platform, while Trump faces legal battles and trading restrictions as a major shareholder.
Former President Donald Trump is making history again in the field of business, this time with his new social media venture, Truth Social.
The platform, born out of Trump’s expulsion from mainstream social media after the Capitol riot in 2021, is set to start trading on the Nasdaq stock exchange under the ticker symbol “DJT.” Here’s a breakdown of what’s happening:
The Debut
Truth Social’s parent company, Trump Media & Technology Group, is taking over Digital World Acquisition after a merger. Digital World was already listed on Nasdaq.
The stock of Digital World surged 35% in regular trading before the debut.
Trump’s stake in the company is estimated to be worth about $3 billion when trading starts, with the overall company valued at around $5.5 billion.
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Financials and Comparison
Truth Social has faced losses since its launch in 2021, with revenue far lower than other social media giants like Reddit, which is valued at about $8 billion.
While Reddit had over $800 million in sales in 2023, Truth Social generated only $3.3 million in revenue during the same period.
Despite the difference in financials, the market price of Truth Social seems disconnected from its fundamental value, according to experts.
User Base
Truth Social has a relatively small user base compared to platforms like Facebook and TikTok. In February, it had about 494,000 mobile app users and 648,000 web visitors in the US.
However, both mobile app users and web visitors have declined significantly compared to the previous year.
Challenges
The success of Truth Social hinges on its ability to grow its platform, heavily relying on Trump’s personality and brand.
Risk factors include Trump’s personal and business history, including previous bankruptcies.
Trump’s legal battles, including a civil fraud judgment and defamation trial loss, add further complications.
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Trading Dynamics
Experts predict volatile trading as Trump supporters buy and sell shares.
Trump’s shares in the company have surged in value, providing him with financial leverage in his legal battles.
Trump is currently restricted from selling shares for six months, pending approval from the company’s board.
Background on SPACs
Digital World Acquisition Corp., the shell company merging with Trump Media, is a special purpose acquisition company (SPAC).
SPACs offer an alternative route to going public without a traditional IPO process.
The merger with Digital World gives Trump Media access to significant funds raised through public investors.
Symbolism and History
The choice of the ticker symbol “DJT” holds significance, as it mirrors Trump’s initials.
This isn’t the first time Trump has been associated with a publicly traded company; in 1995, Trump Hotels & Casino Resorts went public but eventually filed for bankruptcy in 2004.
Future Plans
Trump Media’s CEO, Devin Nunes, pledges to continue building Truth Social as a platform for free expression and to challenge Big Tech censorship.
With the merger completed, Trump Media is set to pursue its vision as a publicly traded entity.
The launch of Truth Social marks a significant moment in Trump’s post-presidential ventures, blending politics with business in the ever-evolving landscape of social media.
