My guess is that most people on TS are reporters and bloggers who follow it to see what Trump is saying.
Yeah, I know of at least one guy.
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.
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.
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.
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.
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.
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.
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.
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.
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.
I found this sorta helpful.
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).
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?
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.
That’s just splendid.
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).
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.
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.
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:
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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.
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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.
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.