Saturday, March 23, 2024

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I’m quite sure that’s why Trump changed his position on TikTok.  But the value of Truth Social is very much dependent on taking Trump’s hype seriously. Something too many people continue to do.
The price of shares in Digital World Acquisition Corp. closed trading Friday nearly 14% lower than their opening price after the shell company's shareholders approved a merger with the social media company owned by former President Donald Trump. 
DWAC had opened the trading day at $44.20 per share, but quickly tumbled on the heels of the vote.
The market agrees with Michael Cohen:
"I understand it has like 15 million users on it," he elaborated. "Compare that to somebody like Taylor Swift who has 120 million followers — 120 million. What is the profitability that they are making the statement that it is worth not just into the millions or the hundreds of millions, but into the billions of dollars? I don't buy it either." 
"They are trying to hype up the stock the same way they would do it for Trump Mortgage, Trump University, Trump Vodka, Trump Steaks, Trump this or Trump that — it's not worth anything " he added. "There is no profitability and there is no future in sight for that profitability either. I mean, who wants to go on to Truth Social? It is nonsense and I do not think that anybody is going to take this -- the stock as an advance for cash."

CNN is reporting, "Outside of his MAGA movement, though, the social media site is struggling to find a wider audience. It is hemorrhaging users, and its traffic has plummeted. There were roughly 860,000 accounts active on the site as of November – a tiny blip compared with more mainstream platforms." 
The report notes that after three years of existence, Truth Social lacks appeal to new users with the app "not among the 100 most downloaded social media applications in the Apple App store." 
With CNN reporting, "Trump Media’s management warned last year that the company was at risk of insolvency without a merger, and most analysts are skeptical of its current valuation above $6 billion," Jay Ritter, a finance professor at the University of Florida indicated he was less than impressed. 
"It’s grossly overvalued. It qualifies as a meme stock for which the price is divorced from fundamental value,” he explained. As noted, the platform will live or die with Trump's fortunes and participation. 
According to Josephine Lukito of the University of Texas at Austin, "Truth Social’s clout is driven very much if not entirely by Donald Trump’s popularity. Without him, I don’t think there’s a viable path forward for it.”
That $3 billion Trump now has? It’s in paper only, and it lost value yesterday. Unless Trump can pump up the platform, its fortunes depend entirely on his fortune. And that’s not a good thing.
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