I don’t know if this is factual thread, an opinion thread, or a political thread.
Trump owns 60% of Truth Social and will make out like a bandit. How it the world is it worth so much?
I saw that in the third quarter of 2023 the company generated just $1.1 million in revenue. REVENUE not profit.
According to this guy, it can’t.
“It’s losing money, there’s no way the company is worth anything like" what the stock price suggests, said Jay Ritter, an IPO specialist at the University of Florida’s Warrington College of Business.
“Here, given the stock price is so divorced from fundamental value, it’s kind of the same issue that came up with meme stocks,” he said, recalling companies whose share prices once soared far beyond what professionals considered rational. “With AMC and GameStop, the price was way above fundamental value, and there’s the question of: Can you get out before the music stops?”
Who is saying it’s worth $6B? Because if it’s the head honcho, he has a reputation for lying and making things up.
Because its valuation is being propped up by the fanaticism of the same people who are propping up Trump’s electoral hopes. They are not rational, and so will not come to their senses based on something as straightforward as “math”.
You’d think at some point these people would just run out of money, but apparently that point is still some time in the future.
IMHO Trump is supported by Russia’s oligarchs with their operatives worldwide who will finance everything Trump is and he needs, to keep feeding Trump’s ego so they can gain control of our nation. So if it becomes necessary to sell Thoughth Social (Trump’s mispronunciation of it) for him to raise that money it will be provided. Now IDK if the powers over Trump think it is needed, but if they do it will be provided.
The value is based on the current stock price of Digital World, a currently publicly traded special purpose acquisition company (SPAC) that has proposed to merge with Trump Media & Technology Group (which owns Truth Social). The point of an SPAC is to avoid an IPO, which would entail a more rigorous examination of the company and the market by an investment bank to determine the IPO price.
So… a thinly disguised pump n dump scam to fleece the rubes. Gotcha.
I mean, that is basically the entire ‘tech’ industry at that point with ridiculously overstated valuations for companies with no real assets and no foreseeable way of ever realizing sufficient profit to justify them. The real question is, “Why is Truth Social valued at only $6 billion?” with the i plication that Trump can’t even scam well at that level. But then, this is a guy who has run multiple waterfront casinos into bankruptcy despite the fact that they are the one business with a statistically guaranteed profit margin if you can just get asses in seats.
Stranger
Except the “dump” part isnt’ going to work for Trump. In the short term, at the scale that he needs to deal with his current troubles, it would hugely depress the stock price. In the long term, presumably the market will come to its senses and recognize the ridiculously inflated valuation. Truth Social is not only losing money, it’s also losing subscribers. The number of rubes interested in Trump’s randomly capitalized or all-caps rants about “Witch Hunts” is very limited. You generally can’t go wrong extrapolating from the principle that “everything that Trump touches turns to shit”. It’s about as predictable as sunrise.
What if he had another entity that shorted the stock at the same time he was dumping his own shares, causing the stock price to plummet?
I suppose he could, but that would open him up to a GameStop-like public sabotage where say, large swaths of Democrats start buying up Truth Social stocks to inflate the price and impose massive personal losses on Trump, directly. Surely even he’s not that foolish.
My guess is that it would be another reason that he might end up in jail and/or face huge fines. Trump would be considered an insider according to SEC rules both because of his role at Truth Social and possibly also because he would be taking an action that predictably affected the stock price. Also, insiders are not permitted to short stocks.
I think many tech companies are vastly overvalued. It’s FOMO. Everyone wants to be a part of the next Amazon or Apple or Microsoft. So, lots of people pile on and hope for some magical future to payoff.
It’s the Emperor Has No Clothes writ large. Truth Social is but one of those.
Surely we’re past the point of ever thinking this.
If this merge were to happen, would TS stock become DW stock at a 1-to-1 ratio? Or would there be a different ratio proportional to the relative values of the two companies. It seems like it would only make sense to do a 1-to-1 share exchange if the two companies had the same valuation. If they didn’t, it seems like the TS stockholders would get 1 DW stock for every X stocks they had in TS, where X is the value of a DW stock divided by the value of a TS stock. So if DW is 1000x more valuable than TS, I would expect there to be a 1-to-1000 stock exchange on the merger. In other words, if the value of someone’s holdings in TS stock is $1000, I would expect their holdings in DW stock after the merger to be worth about $1000.
Trump Media & Technology Group is private. Well, was – apparently DW stockholders approved the merger this morning.
Even so, I wouldn’t expect the shareholders of DW would just dilute their shares for nothing. TS can say their valuation is whatever they want, but the DW shareholders would need to agree in order to approve the merger. I would guess they’d only do a 1-to-1 exchange if they really thought TS was worth about the same as DW.
Can they? Isn’t Trump on the hook for nearly $500 million for making up valuations?
My understanding is that DW is simply a holding company for TS and has no other inherent value on it’s own.
Other than Trump, does anyone use TS? I never hear anyone’s tweets from there quoted (which is the only reason I know a lot of people use xwitter). Do people post photos of their lunch, or discuss the NFL? Or is it only a vehicle to discuss Trump?