Most of that is loss non-cash option-valuation dark magic. They’re losing about $9.3mm a quarter on their operations [1]. Given their $230mm cash pile, that’s over six years of runway.
The punch line is less than $1mm of quarterly revenue.
> In Q1, the company recorded $311 million in non-cash expenses arising from the conversion of promissory notes, and the associated elimination of prior liabilities, immediately before the closing of TMTG’s merger with DWAC.
Anyone looking at the SEC filings to see whose promissory notes?
Media is almost always a money loser, and more-often-than not a ’company paper’ a la Amazon & WaPo. Sometimes the funding is less obvious, e.g. mainstream TV, but major advertisers accept a negative return on the ads themselves in order to support the market-forming functions of the channel (impact on regulation, etc).
Only an idiot would actually lose hundreds of millions on something that should just be a PC server running in a closet somewhere, on a residential broadband connection.
It's probably a lie, for tax purposes. The fake loss can offset some real gain elsewhere.
Donald Trump owns ~80 million shares of Truth Social (58%). The company, as a profit-making enterprise, is basically an abject failure, but as a way to funnel money to Donald Trump, it is a roaring success. It would be frowned upon if a foreign government were to write a check to Donald Trump for, say, $100 million, but a sovereign wealth fund is perfectly capable of 'investing' a similar amount in his useless shell corporation. His stock in Truth Social, which has no possible future in which it's a profitable enterprise, is worth a few billion dollars because people with money are willing to use it as a vehicle to bypass restrictions on campaign donations.
If the Saudis want to "invest" $2 billion, they don't have to give it to Jared Kushner, they can just have their sovereign wealth fund dump it into this company and let the Trumps do whatever they want with it.
> Why would you need a secondary market to buy $DJT shares?
The people buying shares on the stock exchange are not buying them from Trump. They are not buying them from Truth Social. Trying to bribe Trump by buying DJT on the open market is beyond bone-headed dumb.
Trump owns 57% of the shares. (Possibly more now; https://www.cnn.com/2024/04/22/business/trump-media-stock-tr... says 65% either now or shortly) You don't need to buy new ones from Truth; you buy ones already on the market to run the price up. This directly benefits the guy holding the majority of the shares, and in a few months he can freely sell them.
> You don't need to buy new ones from Truth; you buy ones already on the market to run the price up. This directly benefits the guy holding the majority
You’re describing a pump without the dump. There are a lot of reasons this is invalid. Please take it from a professional in this space for decades that your hypothesis is testably false. Even if it did transfer wealth to the Trumps, it wouldn’t do so definitively, and so be diluted in leverage in comparison with a smaller, more direct measure.
Trump would obviously be the one dumping some shares.
As a professional in the space, help me understand. What prevents the Saudis from offering $10-20B to take $DJT private by buying out all the shareholders?
(Like Musk’s $420 tweet that got him SEC minders, but real.)
Yes, this is clearly a two-party coordinated pump and dump. Unless anyone wants to claim with a straight face that Trump Social is a good investment at its current price-to-earnings ratio?
Minus the foreign money laundering/bribery and fanatic cult driving up the valuation, what do you think it's actually worth? $200 mil? I am giving it a generous 50x multiple on revenue.
The entire Mastodon project including two instances (mastodon.social + mastodon.online) with about 1/3 the users between them runs on a $22k/month Patreon. And it is a fork of Mastodon, so that's a good comparison.
Yes but collective funding wouldn't be very free market of you, would it?
Seriously though, it would be hilarious to see this fail as Truth Social is based[0] on Mastodon. It would be hilarious to see the free market guy go bankrupt again while the thing they stole from keeps trudging along funded by donations.
I'm trying to piece together what parts of that comment are serious and what are heavy sarcasm. On balance, though, it seems you think something trudging along because of donations is unsupported by the free market.
Do you think that? Because if you do I want to point out that donations are one of the ultimate expressions of the free market. The open source ecosystem is in fact the most extreme free market we have available in the world today. It is basically peak capitalism, and a go-to example for how an unregulated free market can generate unbelievable amounts of value (who seriously believed in the 90s that the price of software could naturally drop to $0?).
Free software existed in the 90s and the most important free software ever made, the web, came out of a state funded institution.
Open source software is in a market but markets predate capitalism by thousands of years and are part of a variety or political and economic systems most notably communism (and no the USSR cannot be used as an example of communism in action, the first thing that Lenin did was dissolve the Soviets).
Finally open source is highly regulated. Try posting source code someone claims copyright on. Or is deemed illegal. There have been unregulated markets in history. Open source just isn’t one of them.
> Free software existed in the 90s and the most important free software ever made, the web, came out of a state funded institution.
Yeah, governments can do fundamental research fine. Nobody has any idea what is going on in fundamental research, so the government can't be at a disadvantage by being disorganised.
Where an idea comes from doesn't matter. Anyone can have a good idea, even the insane.
> Finally open source is highly regulated.
There isn't any inconsistency between free markets and regulation. Nearly all free markets have to be regulated at some level. Contracts need to be honoured so that people can make deals over time - otherwise it is just a barter system (the only possible theoretically unregulated free market! Even then not a guarentee). There isn't any point giving up products like insurance in the aid of some sort of technical purity.
When people say "deregulate" there is an implied "of regulations I don't agree with". Obviously everyone favours some level of regulation - although the useful level is so far away from where the typical legislative framework lives it is the same thing as calling for no regulation for average debate. People are difficult to dissuaded from putting dictators in charge - it is the naive response to every challenge - and they end up in the regulatory bodies.
> and no the USSR cannot be used as an example of communism in action, the first thing that Lenin did was dissolve the Soviets
You aren't wrong, but the fatal flaw of communism is that there isn't a theoretical way to keep power with the soviets without devolving back to capitalism. Powerful people end up with control of the capital. The only fundamental difference is that capitalism demands powerful people at least, y'know, build and maintain the capital and replaces them if they don't. Communism, when the powerful people didn't properly tend to capital, didn't replace the owning class and people starved.
Wait wait... I've ignored everything political as much as I can, but don't tell me we're getting sold out on some $3B valuation of an unpopular Mastodon Instance? It never crossed my mind to consider the "tech stack" of this farce.
Please show me any other companies with a > $6 billion market cap with < $1 million in revenue, especially companies that don't have heavy up-front R&D/capital costs.
All that matters for social media companies is user growth and retention. It's always possible to monetize attention. That's why Reddit, a nearly two decade old company that posted a $500M loss last quarter, is worth $10B.
Facebook didn't monetize until 5 years in, YouTube didn't really ramp up ads until at least 5 years in either. And it bled money for at least a decade. Snapchat also 4 years or so before monetization became a focus. WhatsApp barely had any revenue when it was purchased for $19B.
I'm not saying Truth Social is in the same caliber at all as the above companies, but inflated tech valuations happen every single cycle (see WeWork). There's over 1200 private startups right now with a valuation over $1B, many of which have low revenue: https://www.cbinsights.com/research-unicorn-companies
Literally every example you give has a stark, stark contrast to DJT. The number of MAUs TruthSocial has is a rounding error compared to Reddit, Facebook, YouTube, Snapchat, WhatsApp or Twitter when they went public or were acquired. Talking about "losing money" is pretty irrelevant - I wasn't even talking about profit, I was talking about top-line revenue. By literally any metric you can choose - users, growth, revenue, profit, tech maturity, etc. etc. - TruthSocial looks like a joke compared to similar companies at a public stage in their lifecycle at that valuation. The only thing that explains DJT's valuation is:
1. Meme stock
2. The cult believing Jeezus wants them to buy this stock
3. The most logical IMO, folks believing that if Trump wins the presidency that everyone who wants a pardon or some other government favor will start buying a shitload of Truth Social ads.
While he could probably require it to be used in addition to other platforms, I don’t think he'd be legally able to force it to be the only platform used.
The whole thing is just a money laundering scheme. It’s illegal to give money to Trump as a donation, but if you buy the worthless shares in his company, it’s (arguably) legal, and he has a number of ways of siphoning off this cash into his own pocket.
If I were investigating, I’d be looking at ways people could prove to Trump that they actually bought (and held) the shares.
$750K in revenue? <$300 million on-hand? I'm surprised it's lasted this long. But most shocking of all: $6.6 billion-with-a-"b" market cap? Who the hell bids this shit up? Who but DJT himself would touch this stock?
But while Truth Social is on it's way to being delisted, today I learned a valuable lesson: don't make the stock symbol your initials. Someone is not going to be pleased when "DJT" is a penny stock trading OTC.
> Who the hell bids this shit up? Who but DJT himself would touch this stock?
Probably a mix of true believers (“Trumpism is a cult!” is basically a meme but also contains a kernel of truth) and rich folks looking to make a “donation” to Trump without directly doing so.
It’s like how Trump’s hotel in DC was constantly packed until the day he lost the presidency. If you were a foreign dignitary, walked into the Oval Office and tried to give Trump a suitcase of cash… well, that would be bad. But if you walked in and said “Mr. Trump! My staff and I have been enjoying our stay in the luxury suites of your hotel” then that’s just innocent conversation about how you recently transferred some money into his pockets!
> Who the hell bids this shit up? Who but DJT himself would touch this stock?
Oligarchs who can’t otherwise send Trump billions in campaign contributions. Bid it up, let him sell, and suddenly he owes the bonesaw and polonium people a big favor.
Trump won against hillary spending roughly half as much as she spent and spent proportionally even less to win the primaries. He's not a candidate that wins based on money, which is in contrast to almost every other election in modern US history. Maybe he is getting money in shady ways, but his funds compared to his results wouldn't suggest that is the case.
He appealed that case and it's not a criminal case to begin with, he can juggle his finances and avoid probably the vast majority through loopholes and just refusing to pay while new york attemps (and probably fails) to garnish hundreds of millions from him and he'll probably brag about it the whole time to his fanbase.
Its being a civil case is entirely irrelevant to his financial situation.
The appeal's likely failure is part of why getting to the end of the Truth Social lockup period is so critical to Trump. Anything he can do to delay until then, he will.
Plenty of Trump's properties are within NY; the AG was ready and poised to start seizing. Hard to move Trump Tower out of NYC without someone noticing.
> In Q1, the company recorded $311 million in non-cash expenses arising from the conversion of promissory notes, and the associated elimination of prior liabilities, immediately before the closing of TMTG’s merger with DWAC
SPAC promoters are harsh mistresses.
Hopefully Trump can get to the dumping of his shares soon, DJT share price has recovered from its lows.
The punch line is less than $1mm of quarterly revenue.
[1] https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849635/0...