Tom Minear: How Trump Media’s stock market stunner could up-end the US election
Donald Trump’s social media platform is not a good business, Tom Minear argues, but its $US10bn valuation may have major implications for the former president’s political future.
World
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The truth about Truth Social – the social media platform Donald Trump created after he was banned from Facebook and Twitter over the January 6 riot – is that it’s not a good business.
The numbers don’t lie. It has five million active users, a rounding error compared to the social giants, and many of those are only there for the former president’s late-night rants.
Truth Social’s parent company Trump Media made a paltry $US5.6m ($A8.5m) in revenue over the past two years, recording a $US58m ($A88m) loss in 2023. Trump assured his 6.9 million followers the business was “very solid”, although that’s kind of the point – he has 87.3 million on X, formerly known as Twitter, even though he never returned to the platform.
How then did Trump Media become worth $US10bn ($A15.2bn) when it went public in March?
I’m no stock market expert, but it’s a story worth understanding given the implications for Trump’s re-election campaign, not to mention his potential second term in the White House.
Trump Media’s share price became detached from reality because his supporters bought in en masse. For Trump, this was even better than campaign donations, driving up his net worth by billions of dollars at least on paper.
The windfall helped him secure the $US175m ($A265m) bond he needed to challenge a $US454m ($A689m) civil fraud fine which he admitted he could not afford.
While the share price has since fallen, Trump retains a lucrative stake which he can borrow against now or cash out in six months – just in time for the election.
It is not hard to see how this could be exploited, especially given Trump’s identity is so wrapped up in his net worth. Powerful individuals and corporations could buy ads on Truth Social or shares to drive up the company’s value and endear themselves to him.
And what if he returns to power? The platform would boom with the exclusive posts of the world’s most powerful man, one who gleefully governs by tweet.
Trump made millions from foreign governments using his properties while he was in office, disregarding constitutional rules to stop the president profiting from his position, and he could do so again with anyone trying to buy influence through Trump Media.
It would also practically become a state-run media arm. And if you think Trump would have a problem with that, just remember he says Xi Jinping is “smart, brilliant, everything perfect”.
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Originally published as Tom Minear: How Trump Media’s stock market stunner could up-end the US election
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