Barron’s highlights an interesting shift in Donald Trump’s approach to policy announcements. As he prepares for his second term, Trump seems to be moving away from X and favoring Truth Social, his own platform, for making key statements. This week alone, Trump has been notably active on Truth Social, posting over 40 times, while his activity on X has dwindled to just two posts. This change in behavior suggests that Truth Social might soon become the primary channel for Trump’s policy declarations, potentially impacting both the platform’s user base and its parent company, Trump Media and Technology Group (DJT).
The implications of this shift are significant. According to George Saravelos from Deutsche Bank (DB), “Truth Social is the new avenue for announcements,” highlighting a need for market participants to monitor the platform closely. Trump’s recent declaration of imposing tariffs on products from Canada, Mexico, and China was made on Truth Social, showcasing the platform’s increasing relevance in political communication.
However, despite the potential for increased visibility, Trump Media and Technology Group’s financial health remains precarious. The company’s third-quarter earnings reported an operating loss of $23.7 million and a net loss of $19.2 million against a mere $1 million in revenue. This financial backdrop contrasts sharply with the company’s stock valuation, which stands at $6.6 billion, driven more by speculative interest tied to Trump’s political fortunes than by business fundamentals.
The stock, trading under the ticker DJT, has experienced volatility. After rallying after the election, it has since declined by about 14%, last trading at $30.68, showing a lack of significant movement in recent days. This might indicate that the market’s initial enthusiasm for Trump’s association with the platform has waned, yet Trump’s continued activity on Truth Social could provide a lifeline for the stock, particularly since a large portion of his personal wealth is tied to his nearly 60% stake in the company, currently valued at around $4 billion.
Moreover, Trump Media seems to be exploring new avenues for revenue. There’s interest in cryptocurrency platforms like Bakkt, and the company has filed for a trademark named TruthFi, which could hint at future ventures into payment services or digital wallets. These moves could diversify the company’s business model, potentially stabilizing its financial position.
Trump has been vocal about his commitment to Truth Social, dismissing any rumors of selling his shares as baseless and possibly illegal. His dedication to the platform could lead to a broader user base if he continues to use it as a primary communication tool during his presidency, although transforming Truth Social into a mainstream competitor like Reddit (RDDT), X, or Meta’s platforms will be a challenging and gradual process.
Barron’s has noted this intriguing shift, emphasizing the potential for Truth Social to carve out a more significant role in the social media landscape, driven by Trump’s influence and policy announcements. However, the path to mainstream success for Truth Social is fraught with financial and operational challenges that only time will tell if it can overcome.
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