# How Can Truth Social be worth $6 Billion? {Trump Media & Technology (DJT)} **URL:** \ **Category:** In My Humble Opinion\ **Tags:** trump\ **Created:** [March 22, 2024, 1:23pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202 "2024-03-22T13:23:05Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![mcgato](https://avatars.discourse-cdn.com/v4/letter/m/ac8455/32.png) [@mcgato](https://boards.straightdope.com/u/mcgato)\ **Post date:** [March 22, 2024, 6:57pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/21 "2024-03-22T18:57:01Z")
> [@Procrustus](#): > > Other than Trump, does anyone use TS? My guess is that most people on TS are reporters and bloggers who follow it to see what Trump is saying. ---
**Author:** ![Moriarty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/moriarty/32/49_2.png) [@Moriarty](https://boards.straightdope.com/u/Moriarty)\ **Post date:** [March 22, 2024, 7:00pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/22 "2024-03-22T19:00:46Z")
> [@Procrustus](#): > > Other than Trump, does anyone use TS? Yeah, I know of at least one guy. > **[Biden, Trolling Trump, Joins Truth Social: ‘Converts Welcome’](https://www.nytimes.com/2023/10/16/us/politics/biden-truth-social-trump.html)** > > The Biden campaign is in search of any edge with voters who could be persuaded to his side. ---
**Author:** ![wolfpup](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wolfpup/32/10618_2.png) [@wolfpup](https://boards.straightdope.com/u/wolfpup)\ **Post date:** [March 22, 2024, 7:10pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/23 "2024-03-22T19:10:47Z")
> [@mcgato](#): > > > [@Procrustus](#): > > > > Other than Trump, does anyone use TS? > > My guess is that most people on TS are reporters and bloggers who follow it to see what Trump is saying.   When I looked at a post he made recently, it had several thousand Likes. I doubt those came from journalists, more likely they’re from his delusional acolytes. Doesn’t mean they actually post there, they may just follow his rantings and furiously keep hitting the “Like” button like trained rats. Now that Musk has turned Xitter into a right-wing cesspool it would be a much more active place than TS for RW nutjobs to hang out. ---
**Author:** ![EddyTeddyFreddy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/eddyteddyfreddy/32/18796_2.png) [@EddyTeddyFreddy](https://boards.straightdope.com/u/EddyTeddyFreddy)\ **Post date:** [March 22, 2024, 7:31pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/24 "2024-03-22T19:31:59Z")
As i understand it, as an insider Trump can’t sell any of his supposedly bigly valued stock for six months, by which time it’s quite possible the stock price will have collapsed. Even if there’s still some value there, any large sale would depress the then-current price. I’ll be interested to see where the stock price goes after the initial IPO transactions. ---
**Author:** ![Johnny\_Bravo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_bravo/32/493_2.png) [@Johnny\_Bravo](https://boards.straightdope.com/u/Johnny_Bravo)\ **Post date:** [March 22, 2024, 7:40pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/25 "2024-03-22T19:40:01Z")
> [@EddyTeddyFreddy](#): > > Trump can’t sell any of his supposedly bigly valued stock for six months, The board, which is just his relatives and friends, can vote to waive that requirement. We’ll see in the next few days whether they decide to do that. ---
**Author:** ![DCnDC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dcndc/32/2842_2.png) [@DCnDC](https://boards.straightdope.com/u/DCnDC)\ **Post date:** [March 22, 2024, 7:45pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/26 "2024-03-22T19:45:53Z")
> [@Johnny\_Bravo](#): > > The board, which is just his relatives and friends, can vote to waive that requirement. They can, but it’s my understanding that vote would be subject to legal scrutiny. I don’t think they can waive the 6 months capriciously, I believe there must be a compelling reason besides “I needed the money”; it needs to benefit all shareholders, not just the primary. ---
**Author:** ![Moriarty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/moriarty/32/49_2.png) [@Moriarty](https://boards.straightdope.com/u/Moriarty)\ **Post date:** [March 22, 2024, 7:55pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/27 "2024-03-22T19:55:33Z")
I posted this elsewhere, but it’s my understanding that really rich people don’t sell their stock to generate income. Rather, they use the valuation of those stocks to get loans, which they then repay at a pittance of interest when compared to any income tax that would be due when liquidating the stock. > [@](#): > > The most common way to do this is a Securities Backed Line of Credit (SBLOC), where you take a loan against the value of your stock portfolio. You could think of this as a Home Equity Line of Credit where your stocks are the collateral rather than your home. An SBLOC has a few benefits that are quite appealing, like flexible repayment schedules, easy approval (with little or no cost) and, in many cases, low-interest rates. > **[How The Rich Use The Buy, Borrow Die Strategy To Avoid Large Tax Bills](https://www.forbes.com/sites/davidrae/2022/07/14/how-the-rich-use-the-buy-borrow-die-strategy-to-avoid-large-tax-bills/amp/)** > > "Buy, Borrow, Die" and has become a way for the uber-wealthy, with tax planning experts by their sides, to fund their lifestyles while minimizing their taxes along the way. So donald doesn’t have to sell his stock to take advantage of its value. And _of course_ he is using magical thinking to value the company. But will any lender accept the valuation? Unless it’s the Bank of North Korea, I have a hard time believing that’s possible. ---
**Author:** ![Dr\_Paprika](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr_paprika/32/3042_2.png) [@Dr\_Paprika](https://boards.straightdope.com/u/Dr_Paprika)\ **Post date:** [March 22, 2024, 8:04pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/28 "2024-03-22T20:04:09Z")
Maybe this (seemingly bullshit) valuation is high enough to convince someone to help pay his other upcoming expenses. But maybe lots of people and companies support Trump Social. Truth be told, I know little about it. ---
**Author:** ![Slithy\_Tove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slithy_tove/32/18248_2.png) [@Slithy\_Tove](https://boards.straightdope.com/u/Slithy_Tove)\ **Post date:** [March 22, 2024, 8:09pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/29 "2024-03-22T20:09:40Z")
And that’s how we got Donald Trump. A middle and working class population who believe the economy is a deck rigged against them, and a rich celebrity who knows how it’s rigged who’ll work it in their favor. (Did someone mention magical thinking?) But as unrealistic as that is, the hope that the system can be actually reformed? Now there’s a fairy tale. ---
**Author:** ![Moriarty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/moriarty/32/49_2.png) [@Moriarty](https://boards.straightdope.com/u/Moriarty)\ **Post date:** [March 22, 2024, 8:44pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/30 "2024-03-22T20:44:54Z")
> [@Slithy\_Tove](#): > > Did someone mention magical thinking? We’ve all logically thought through the problem of some celebrity rich guy selling their stock: If Bezos sold a billion dollars worth of Amazon stock, or Zuckerberg liquidated his Alphabet holdings, it would tank the value of the company. Yet somehow that _valuation_ is sufficient collateral to allow them to secure hundreds of millions of dollars in loans, which they live off of. > [@](#): > > The Bezoses of the world have no need to be paid a salary. Bezos’ Amazon wages have long been set at the middle-class level of around $80,000 a year. > > For years, there’s been something of a competition among elite founder-CEOs to go even lower. Steve Jobs took $1 in salary when he returned to Apple in the 1990s. [Facebook’s Zuckerberg](https://www.washingtonpost.com/news/on-leadership/wp/2014/04/03/mark-zuckerberg-joins-the-1-salary-club/), Oracle’s Larry Ellison and Google’s Larry Page have all done the same… > > So how do megabillionaires pay their megabills while opting for $1 salaries and hanging onto their stock? According to public documents and experts, the answer for some is borrowing money — lots of it. > > For regular people, borrowing money is often something done out of necessity, say for a car or a home. But for the ultrawealthy, it can be a way to access billions without producing income, and tus, income tax… > > The tax math provides a clear incentive for this. If you own a company and take a huge salary, you’ll pay 37% in income tax on the bulk of it. Sell stock and you’ll pay 20% in capital gains tax — and lose some control over your company. But take out a loan, and these days you’ll pay a single-digit interest rate and no tax; since loans must be paid back, the IRS doesn’t consider them income. Banks typically require collateral, but the wealthy have plenty of that… > > In both 2016 and 2017, investor Carl Icahn, who ranks as the 40th-wealthiest American on the Forbes list, paid no federal income taxes despite reporting a total of $544 million in adjusted gross income (which the IRS defines as earnings minus items like student loan interest payments or alimony). Icahn had an outstanding loan of $1.2 billion with Bank of America among other loans, according to the IRS data. It was technically a mortgage because it was secured, at least in part, by Manhattan penthouse apartments and other properties. > > Borrowing offers multiple benefits to Icahn: He gets huge tranches of cash to turbocharge his investment returns. Then he gets to deduct the interest from his taxes. > **[The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the...](https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax)** > > ProPublica has obtained a vast cache of IRS information showing how billionaires like Jeff Bezos, Elon Musk and Warren Buffett pay little in income tax compared to their massive wealth — sometimes, even nothing. ---
**Author:** ![Dr\_Paprika](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr_paprika/32/3042_2.png) [@Dr\_Paprika](https://boards.straightdope.com/u/Dr_Paprika)\ **Post date:** [March 22, 2024, 9:33pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/31 "2024-03-22T21:33:30Z")
I found this sorta helpful. > **[How does Trump stand to make $3bn from Truth Social being listed on the market?](https://www.theguardian.com/us-news/2024/mar/21/trump-truth-social)** > > The company – which has only raised $5m since 2021 – benefits from meme stock status, valued not for revenue but for clicks ---
**Author:** ![zbuzz](https://avatars.discourse-cdn.com/v4/letter/z/e19b73/32.png) [@zbuzz](https://boards.straightdope.com/u/zbuzz)\ **Post date:** [March 23, 2024, 2:44am UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/32 "2024-03-23T02:44:27Z")
> [@Johnny\_Bravo](#): > > > [@EddyTeddyFreddy](#): > > > > Trump can’t sell any of his supposedly bigly valued stock for six months, > > The board, which is just his relatives and friends, can vote to waive that requirement. We’ll see in the next few days whether they decide to do that. I think it’s the DWAC board, not the TMTG board, that can waive the lockup period. I also think that if this were to happen, the merger agreement stipulates that it had to happen before the merger or at the closing. So, if that’s right, it’s now too late. Unless there is still more business to do with the closing. But it might be moot anyway because I think (another “I think”) he can transfer his shares to a trust and use the trust as collateral on a loan, which effectively makes it like a pile of cash to him (or however much whoever gives him the loan thinks it’s worth). ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [March 23, 2024, 4:15pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/33 "2024-03-23T16:15:04Z")
> [@zbuzz](#): > > or however much whoever gives him the loan thinks it’s worth That’s the step that confuses me. Are those with that sort of money to lend likely to be placing the value of these shares at the currency meme stock value? They appreciate that meme stocks can fall in value as quickly as they rise. If they have no actual intrinsic value then why is there any expectation they would value them as other than worthless for the purpose of collateral? ---
**Author:** ![Stratocaster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/stratocaster/32/16393_2.png) [@Stratocaster](https://boards.straightdope.com/u/Stratocaster)\ **Post date:** [March 23, 2024, 4:25pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/34 "2024-03-23T16:25:08Z")
> [@Moriarty](#): > > So donald doesn’t have to sell his stock to take advantage of its value. > > And _of course_ he is using magical thinking to value the company. > > But will any lender accept the valuation? Unless it’s the Bank of North Korea, I have a hard time believing that’s possible. He can’t even do this. The six-month restriction includes using the stock as collateral. The key shareholders can’t sell ‘em or encumber them in any manner. ---
**Author:** ![Moriarty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/moriarty/32/49_2.png) [@Moriarty](https://boards.straightdope.com/u/Moriarty)\ **Post date:** [March 23, 2024, 4:32pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/35 "2024-03-23T16:32:38Z")
> [@Stratocaster](#): > > The six-month restriction includes using the stock as collateral That’s just _splendid_. > [@](#): > > Not only does that lock-up agreement prevent these key shareholders from selling their stock for six months, it says they have agreed not to “lend, offer, pledge…encumber, donate” that stock during the period. > > If the share price stays above $12 for a period of time, it’s possible that insiders can sell or pledge their stock 150 days after the deal closes. > > “The lock-up is meant to stop insiders from selling immediately after the merger,” said Xavier Kowalski, a former partner at Schulte Roth & Zabel who is now a lecturer in the finance department at the University of Florida. “It also stops them from pledging the stock, like with a margin loan. So it’s going to be difficult to find a way to use those shares to get cash for now.” > **[Trump is about to get $3 billion richer after deal is approved to take his...](https://amp.cnn.com/cnn/2024/03/22/business/trump-truth-social-dwac-shares)** > > Investors have approved a deal on Friday to make Truth Social owner Trump Media a publicly traded company. The green light from shareholders clears the final major hurdle for a long-delayed transaction that will generate a multi-billion dollar... ---
**Author:** ![CaveMike](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cavemike/32/16379_2.png) [@CaveMike](https://boards.straightdope.com/u/CaveMike)\ **Post date:** [March 23, 2024, 6:03pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/36 "2024-03-23T18:03:17Z")
Does anyone know how much DWAC paid TS? I can’t find it searching or in the agreement. I see DWAC is valued at 1.37B. Does a SPAC market cap roughly track the escrow? I also saw DWAC raised 287M at IPO and then 1B with a PIPE, but then saw an article from last Oct that they were returning almost 500M. I’m curious what the conversion rate is from DWAC to DJT, but don’t see any reporting on it. The reporting I saw valued DJT at 5.7B so if DWAC paid say 1.425B, then I think the ratio is 1:4 (ignoring the cut that the officers take). ---
**Author:** ![wolfpup](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wolfpup/32/10618_2.png) [@wolfpup](https://boards.straightdope.com/u/wolfpup)\ **Post date:** [March 23, 2024, 6:12pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/37 "2024-03-23T18:12:11Z")
IMHO – and certainly not a financial whiz – besides being grossly overvalued, a key problem with TS is that any worth at all derives entirely from Trump and his following of lunatic acolytes, and Trump is or inevitably soon will be on the decline. That decline will be precipitous if/when he loses the election. TS was created after Trump was kicked off Twitter, and its sole purpose is for Trump to propagate self-serving lies. This is not a sustainable market, and I can see this whole thing imploding bigly. ---
**Author:** ![wolfpup](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wolfpup/32/10618_2.png) [@wolfpup](https://boards.straightdope.com/u/wolfpup)\ **Post date:** [March 23, 2024, 6:41pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/38 "2024-03-23T18:41:13Z")
Coincidentally, Michael Cohen just made a similar point, that Truth Social is essentially worthless. My argument is slightly different – it may have perceived value today, but soon won’t. The due diligence that will be done by any financial institution offered this stock as collateral will be interesting, although as pointed out upthread, even that won’t be possible for six months. To be fair, when your former boss throws you under the bus and you spend jail time because of him, it introduces a certain negativity. But I still think Cohen is basically right. > **['It's not worth anything': Former Trump lawyer blows a hole in 'hype' over...](https://www.rawstory.com/trump-truth-social-2667585870/)** > > During an appearance on MSNBC's "The Weekend," former Donald Trump lawyer and fixer Michael Cohen dismissed the idea that the Friday merger of his former client's Truth Social — and the cash that reportedly comes with it — will help with the former... ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [March 23, 2024, 6:58pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/39 "2024-03-23T18:58:15Z")
How much actual hardware does TS have? I seem to recall that they couldn’t get cloud providers to host them, so they had to build their own infrastructure. So that may have \*some value, but nowhere near even a billion dollars. I’m thinking of the scenarios for the future of this thing: 1. Trump wins as a lame duck. No one cares about TS anymore because Trump is in power and doesn’t need support to be re-elected. 2. Trump loses. He never runs again. Too old. Trump Social becomes worthless, unless it can be transformed into a general social media site, and manages to come up with some compelling features. Not likely. If Trump loses he might try to make TS his new attention-getting playground, but will anyone care? The only scenario I can see where TS has any lasting value is if something happens to Twitter/X, and TS becomes the only game in town for the right to speak freely. And I don’t think that’s going to happen. ---
**Author:** ![EddyTeddyFreddy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/eddyteddyfreddy/32/18796_2.png) [@EddyTeddyFreddy](https://boards.straightdope.com/u/EddyTeddyFreddy)\ **Post date:** [March 23, 2024, 7:05pm UTC](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202/40 "2024-03-23T19:05:03Z")
> [@Sam\_Stone](#): > > if something happens to Twitter/X, and TS becomes the only game in town for the right to speak freely. Ain’t gonna happen; there are already a number of platforms competing with Xitter. I’ve joined I think half a dozen and am sussing out which I feel most at home at/satisfied with. And they’re not overun with RWNJ trolls. [Previous page](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202.md?page=1) [Next page](https://boards.straightdope.com/t/how-can-truth-social-be-worth-6-billion-trump-media-technology-djt/999202.md?page=3)