'Trump fans' are likely to lose their shirts with Truth Social: analysis
At a time when 2024 GOP presidential nominee Donald Trump is facing some major financial problems — from massive legal bills to hundreds of millions in sanctions and damages — one thing he has going for him financially is his social media platform Truth Social, whose owner, Trump Media and Technology Group, will be publicly traded and has merged with the company Digital World Acquisition.
National Public Radio's Raphael Nam, on March 22, reported that Trump is "on the verge of a windfall of billions of dollars" and "stands to make over $3 billion" from the company "going public."
But journalist Helaine Olen, in an op-ed published by MSNBC on March 25, argues that in the long run, "Trump fans" are likely to lost their shirts if they invest heavily in Trump Media and Technology Group.
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"Common sense says this is one to stay away from, even if the newly combined company is likely to be initially valued around $5 billion on paper," Olen warns. "The man is a serial bankrupt with a reverse Midas touch. And that's before you remember Truth Social, founded by Trump after he got tossed off Twitter, is the black hole of social media sites, with a fraction of the users of its more popular rivals."
The journalist adds, "But it's unlikely Trump fans will heed my advice. His supporters believe in him with the fervor of cult members."
Olen isn't denying that the Trump Media and Technology Group/Digital World Acquisition merger won't bring Trump a lot of money initially, but she predicts that down the road, it will plumet in value.
"Truth Social’s revenues are, not surprisingly, paltry," Olen explains. "Moreover, going public via a special purpose acquisition company, or SPAC, is hardly a surefire financial bet…. But Trump is highly unlikely to be among those getting hosed — even if the deal isn't ultimately quite as wealth inducing as it would seem."
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The journalist continues, "At Digital World Acquisition's current stock price, Trump is set to gain $3 billion. But that's, for the time being, paper money. The company — in common with other SPACs — will not permit insiders to sell or borrow against shares for a six-month period after going public. And at the six-month mark, it's quite possible that $3 billion number will be lower — much lower — than it is right now."
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Helaine Olen's full MSNBC op-ed is available at this link.
