Trump's Truth Social to go public?

[Sarkus]

It seems that Trump's Truth Social (well, the media company that owns it) has SEC green light to merge with DWAC - the special purpose vehicle set up a few years ago to take it public.
At current price for DWAC this would put Trump's eventual share at c.USD 4bn. Not too shabby, although he wouldn't be able to sell until 6 months after the merger.
So what will this company do that makes it worth USD 9bn or so? The only operating activity is Truth Social... which currently has revenues of c.USD 5m and trading losses of c.USD 40m.
That's it.
The rest of DWAC I think is investment of c.USD 300m, to be used to grow Truth Social once the merger goes through... or at least that's the idea.
It still needs approval of DWAC shareholders, but all indicators are that it will proceed.

So how will this play out? Who knows, as this is an era of meme stocks, cryptocurrency, and cults of personality. The more Trump seems to be winning the Rep primaries, the stock may even increase (as DWAC did when deSantis pulled out etc), but ultimately it seems to be a case of a current valuation vastly in excess of sense.

Trump won't be able to sell his stock for the first 6 months... which may be enough time for Joe Public to realise this is really just a "pump and dump"... talk up a stock, let unwitting retail investors buy into it and push the price up and then those who bought in at the start sell at vast profits. A bit like crypto in that regard. Unfortunately this is the nature of a free market, one that doesn't really prevent people being stupid. People will buy into it not for what they do but for Trump, because they think he wouldn't shaft them. He'll end up making a fortune, and millions of retail investors will be regretting handing him their money.

Maybe by the end of the 6 months people will start to tie the stock value to the actual financial performance of the operations... and it will tank before Trump and others can sell. I can hope that's the case, but I'm not sure it will be.
Maybe by the end of 6 months Trump will have failed in his bid to win the White House, and his brand will be sufficiently on the wane, people finally fed up with his whining, his cry-baby antics, and his utter disregard for anyone but himself. And maybe Truth Social will have failed by then. But I think that will be maybe a year away at least, giving him plenty of time still to cash in at everyone else's expense. I do see the endeavour eventually becoming bankrupt, though, as Truth Social ultimately fails. How it gets there, and how much money Trump pockets on the way, well, we live in interesting times.
But he's likely going to do alright out of it, financially speaking. Whether he will be able to enjoy it, or just count it from his prison cell...

 

[C C]

[...] Trump will have failed in his bid to win the White House, and his brand will be sufficiently on the wane, people finally fed up with his whining, his cry-baby antics, and his utter disregard for anyone but himself. And maybe Truth Social will have failed by then. [...] But he's likely going to do alright out of it, financially speaking. Whether he will be able to enjoy it, or just count it from his prison cell...

I recall something about an old TV interview with Trump dating back to the 1970s. Which was used to make the proposition that Trump had perversely started out as a mature and reasonable person when he was young, and then inverse to everyone else he progressed toward adolescent behavior as he got older.

I wish now that I had taken a look at it.

The video interview below only dates to 1980, but there's arguably still a faint or lingering remnant of what they were referring to in the years previous.

Not that if he'd had Truth Social back then, similar advantages would not be taken. But there's at least the formal facade of a disciplined, cutthroat magnate. Rather than the feverish wild man vocalizations and animated gesticulations of later, and especially today.

--> VIDEO'S LINK

 

[Sarkus]

So, Truth Social has indeed gone public, via the SPAC listed as DWAC (although now trading under DJT, I believe).
Let's be clear: it's a meme stock. By that I mean that the stock price has nothing to do with it's financial performance, be that future or past. For example, it is currently trading at c.USD41 which values it at 5.5bn. it has peaked at almost 80!
Is it worth 5.5bn? Well, Truth Social's 2023 financials showed a whopping 4m in revenue, and 50m of losses in the year. So, no, it's not.
It's auditors have given it a qualified audit opinion, citing concern about being a going concern. So, no, it's not worth 5.5bn.
One thing the merger with DWAC did do was give Truth Social access to 200m in cash to expand operations, and to try and be profitable. But it won't help, at least not in it's current guise as Trump's mouthpiece.

Trump is also flouting the boundaries, if not already stepping well over, the SEC rules governing what one can say about stocks you own... i.e. in his own inimitable way Trump is "pumping" up the value of the stock by shouting (via Truth Social) about how good it is. Which is against the rules. But I guess he thinks as long as he gets away with it until he can "dump" his holding and leave the investors out of pocket, he'll do what he wants.
Watch this space!!

 

[sculptor]

If I am accurate?
DJT stock hit a high of about 72 dollars and is not trading around 36 dollars

who the hell would buy it?

..........................................
of course, if djt wins the presidency , DJT(the stock) might well reach new highs?

 

[Sarkus]

Yep - its actual post-merge high was in fact 79.38, and is now at post-merge low of 36. Most analysts would say that that is still about 30 too high!
It's difficult to value the company, though, as there are few comparisons out there. Twitter/X is the obvious one, with Twitter having c.450m active users and worth c.40bn USD. At a simplistic level this is roughly 88USD per user. Truth Social has about 2 million (per here: https://www.searchlogistics.com/learn/statistics/truth-social-statistics/), so this would put Truth Social at c. 180m USD. They do have c.200m in cash reserves (which came from the merger with DWAC), so that would perhaps put it at c.400m.
Based on c.135m shares, though, that would be c.3USD per share - or less than 10% of current stock price.

I think that even that is being generous, though.

Who the hell would buy it, indeed!

 

[Sarkus]

This is turning into a bit of a "stock watch"...
Currently trading at 33.94 USD - so down another 9.4% today. That's somewhat more than the DOW (-1.36%) predicated on higher-than expected inflation (3.5%).

 

[Seattle]

Who the hell would buy it, indeed!

The MAGA base apparently.

 

[cluelusshusbund]

This is turning into a bit of a "stock watch"...
Currently trading at 33.94 USD - so down another 9.4% today. That's somewhat more than the DOW (-1.36%) predicated on higher-than expected inflation (3.5%).

Trump stock holdin steady... this could be the bottom... could be time to jump in an make millions

 

[sculptor]

Betting on political outcomes is illegal in these united states.
However, one can place a bet through a Canadian betting parlor
or
one could see a bet(going long) on DJT as a bet that Trump will win the November election.
conversely, shorting DJT could be seen as a bet that Biden will win the November election.

and
.............................................???

 

[Sarkus]

Trump stock holdin steady... this could be the bottom... could be time to jump in an make millions

Currently trading at... USD 27.06.
This drop of 5-6% on prior close is on the back of a filing by the company to issue 21.5 million more shares (upon the exercise of warrants), which they're hoping will raise USD2-300m for the company. However, those warrants dropped 8% in value on the markets as well.

 

[Sarkus]

Closed at 26.6 and since then has dropped to 25.5 in after hours trading.

Still thinking to jump in and make millions, CLH?

 

[cluelusshusbund]

Currently trading at... USD 27.06.
This drop of 5-6% on prior close is on the back of a filing by the company to issue 21.5 million more shares (upon the exercise of warrants), which they're hoping will raise USD2-300m for the company. However, those warrants dropped 8% in value on the markets as well.

Closed at 26.6 and since then has dropped to 25.5 in after hours trading.

Still thinking to jump in and make millions, CLH?

BTW… its old news…

Spoiler

i dont want to talk about it

… so jus ignore post #8

Ah ha it went down agan…grate news… thanks

I feel it in my bones… NOW coud be the time to go all-in an make millions… yes.???

Yep… buy now… an if somptin good for Trump happens… like hes found innocent… the stock for almost sure coud rocket to a new high

Wit all the shares Trump could wind up owning he coud make billions but I would settle for millions

 

[billvon]

I feel it in my bones… NOW coud be the time to go all-in an make millions… yes.?

I've invested in some fairly good stocks in my time - Nvidia, Qualcomm, Enphase, Tesla, Microchip. I invested in all of them because I thought they had good products/services to sell that would make them a good profit.

What is Truth Social going to sell? What does it have to offer that's unique/valuable? A right wing friendly chat site? That's Twitter/X now. Something associated with Trump? He's rapidly going bankrupt.

 

[Sarkus]

23.41 - so that's another 12% down since yesterday's closing.

 

[Tiassa]

What is Truth Social going to sell? What does it have to offer that's unique/valuable? A right wing friendly chat site? That's Twitter/X now. Something associated with Trump? He's rapidly going bankrupt.

With share price dilution in view, we should probably bear in mind that Truth Social doesn't need to sell anything. Even if the share price collapses so that Trump's sixty-five percent (post-dilution) is worth only a billion, it is still, as Stephanie Ruhle described it, found money.

The idea that the stock was anything other than a grift to put money in Donald Trump's hands would be naïve, at best. The only question is whether authorities will catch up with the scheme, this time. As with all else, if Trump goes the remainder of his life without being convicted of a crime, the law enforcers will have finally made clear that they, too, were always a grift.

 

[cluelusshusbund]

What is Truth Social going to sell? What does it have to offer that's unique/valuable? A right wing friendly chat site? That's Twitter/X now. Something associated with Trump? He's rapidly going bankrupt.

Its value right now is an opportunity to become a part of the DJT scam by buying low an gambling that ther will be a new high an then sell befor Trump beats you to it

An credit where credit's due... its mostly been made possible by Dumpster-divin Trumpsters

23.41 - so that's another 12% down since yesterday's closing.

It just keeps getting better... yep... NOW may be the best time to buy

 

[Sarkus]

And you thought cryptocurrencies were volatile!...
DJT back up to c.36 !!

 

[cluelusshusbund]

And you thought cryptocurrencies were volatile!...
DJT back up to c.36 !!

Now that I read over this thred agan... its perty obvious wit those sharp ups an downs that people read my opinions on DJT stock here at Sciforums an are takin immediate buy an sell actions… prollem is… apparently Nunes got wind of it an is reportin his suspicions to authorities… an i coud be in big trouble if they put 2 an 2 together… so in the meantime… when the phone rings or somebody knocks on the door i been hidin in the closet

“Nunes noted that as of Wednesday “DJT appears on Nasdaq’s ‘Reg SHO threshold list,’ which is indicative of unlawful trading activity.”

https://www.cnbc.com/2024/04/19/tru...l-market-manipulation-from-short-selling.html

 

[Sarkus]

Just to keep those that maybe interested in such things, DJT stock is now at 19.50 - so a significant drop from its peak, but still far higher than its fundamentals would suggest it should be at. There's little evidence the company should be valued any higher than its cash on hand, which is c.300m - putting share-priece at between 1-2 USD. The longer it "trades", though, the more those cash reserves will be eaten up with operating losses, which were c.15m in the last report.
If you were, frankly, stupid enough to hold any stock, it's only going to get worse. Far worse. At some point between 20 to 25 September Trump (and other minority stock holders) will be able to sell his holding. If he tries to sell any significant part then it will tank the stock price. To single figures at least, I'd have thought, and possibly as low as 5 USD. And given his need for cash, he might just do it.

 

[Sarkus]

17.13 in after-hours trading as I type. Had been as low as 16.82 on Friday but recovered a tad.

Expect it to go much lower in the coming days as the day that Trump (and others to a lesser extent) can sell their shares (19/20th or 25th, depending on some conditions being satisfied) approaches and people look to off-load in anticipation. Since the company really only has cash assets and no obvious future as a profitable business, the stock, in my view, remains significantly overvalued. I expect single figures soon, and then low single-figures as and when Trump tries to sell, when he shows that he has no faith in his own platform and effectively confirms that it was merely a scheme to make him lots of money at the expense of (stupid/naive/gullible) retail investors. He may still get 1-2 billion out of it, which is obscene, frankly, given that it is all just hot air. But then maybe people really are happy to give a billionaire their hard-earned money for nothing. Takes all sorts, I guess.

I also question how the SEC can not be looking at this whole debacle and not be looking to indict the various players, Trump included, for unabashed fraud: their prospectus had projections of something like 150m of sales in 2024, and c.835m USD in 2025. It is basically making income of less than 1m per quarter at present, while having lost c.400m over the last 2 years (a write-off of c.300m and c.50m of operating losses p.a.). Is the SEC that impotent and its rules that slack to allow this Trump-enrichment scheme a free pass??