- Natalie Sherman
- new york business reporter
image source, Getty Images
Shares of Donald Trump's media company have fallen from last week's highs when it officially listed on the Nasdaq stock exchange.
But at current prices it's still worth more than $7bn (£5.6bn), an impressive amount considering the business behind it.
So what is the Truth Social platform? Who owns it, how many users does it have, how much revenue does it make? And is it the answer to Trump's spiraling bill?
Trump Media & Technology Group was founded in 2021 after Trump lost the presidential election and was temporarily banned from major social media platforms such as Twitter and Facebook for inciting violence.
The idea was proposed by two men, former contestants on his reality show The Apprentice, who saw an opportunity to create an alternative to mainstream social media sites.
In 2022, Trump Media launched its first and, to date, only public-facing product, social media platform Truth Social.
Many of Truth Social's features are the same as X. Users can post “Truth” or “Truth” or send her messages directly. Advertising, on the other hand, is called “Sponsored Truth.”
How many users do you have?
Trump Media claims that approximately 9 million Truth Social accounts have been created since its launch.
Although user numbers are not disclosed, research firm SimilarWeb estimates that Truth Social's website had 5 million monthly visitors in February of this year.
By comparison, TikTok has had over 2 billion visits and Facebook has had over 3 billion visits. According to a report by SamelWeb, X had 104 million visitors in February.
Trump has about 7 million followers on Truth Social, far fewer than X's 87 million followers. The former president's X account was reinstated in late 2022, but he has only posted once since then.
How much money can you make?
Trump Media lost nearly $60 million in 2023, while generating only about $4 million in advertising revenue, leaving its ability to continue as a business in “significant doubts,” according to its latest financial report. I'm warning you that there is.
The report is yet another reminder of the wide disparity between the company's financials and its stock price, which is said to be worth about $7 billion.
To give you an idea, when Twitter went public on the stock market in 2013, the company reported revenue of $660 million and a market value of about $24 billion.
By 2021, the year before Elon Musk acquired Twitter for $44 billion, that number had grown to more than $5 billion.
What will Mr. Trump do for the company?
Trump's relationship with the company is similar to the licensing agreements he used in his real estate empire, which he signed in his name primarily to promote businesses run by others.
In this case, Trump also agreed to post nonpolitical messages to Truth Social first.
Another difference is that the deal did not automatically include a license fee, but instead rewarded Trump with stock in the new startup.
So who owns it?
Trump Media, led by former Republican Rep. Devin Nunes, was originally a private company with 90% ownership by Trump.
The company went public in March 2024 through a so-called SPAC. Basically, it was acquired by a company that was already publicly traded on the stock market, in this case Digital World Acquisition Corp.
Trump now owns about 57% of the combined company, which has been renamed Trump Media and trades under the ticker DJT, Trump's initials.
image source, Getty Images
TMTG's next largest owner is Kuwait-based investment firm ARC Global Investments, with a 6.9% stake, according to documents filed by Trump Media with financial regulators.
Former Apprentice contestants also own large stakes, but their stakes are currently the subject of a legal battle.
Overall, insiders own around 70% of the shares.
Who else owns the stock?
When Trump Media announced plans to go public in 2021, the news prompted small investors to snap up Digital World stock, contributing to the stock's rise and drawing comparisons to pandemic-era meme stocks. evoked.
At the end of 2023, large financial companies held only about 5% of Digital World's shares, far less than usual, meaning that everyday investors held most of the rest. .
Once the merger is complete, these individuals will also own a significant portion of Trump Media, although the exact amount is unclear.
Conversations in online forums suggest that at least some of these shareholders see the stock purchases as a bet against Mr. Trump, a way to support him as his legal problems and accompanying claims mount. He seems to be thinking about it.
Trump has been ordered to pay more than $350 million in damages in the civil fraud case, with an additional $100 million in interest possible.
So will this solve Donald Trump's financial problems?
After the merger was completed, Trump's net worth more than doubled overnight to more than $5 billion, according to Forbes magazine.
Mr. Trump will be prohibited from selling his roughly 78 million shares for six months unless the company grants a waiver.
But he stands to reap a windfall if he decides to cash out, even if prices plummet, as many analysts predict.
The stock price of Digital World (currently Trump Media) has fluctuated significantly since 2021, and this trend is expected to continue.
When Trump Media officially debuted on March 26, they jumped to more than $70 each.
It has since fallen and now trades at around $50 per share, making Trump's holdings worth $4.1 billion.
However, this is the stock price the day before the launch, and is equivalent to three times the value of Digital World stock at the beginning of 2024.
Even if the price drops to $1 a piece within six months, Mr. Trump could raise more than $78 million from the sale.
