Experts believe that Donald Trump’s social media platform Truth Social, which is set to go public through a merger with Digital World Acquisition Corp, may face a significant drop in stock value following its initial public offering. While Wall Street currently values Trump Media at around $9 billion, some analysts argue that the company’s underlying business is not worth much. Jay Ritter, a finance professor at the University of Florida, noted that the stock price could potentially plummet to as low as $2 a share if the company fails to deliver profitable results.
The merger between Trump Media and Digital World Acquisition Corp was approved by shareholders on Friday, paving the way for Truth Social to enter the public market. Despite the initial excitement surrounding the merger, concerns have been raised about the sustainability and profitability of Trump’s media company. Matthew Kennedy, a senior IPO strategist at Renaissance Capital, pointed out that the current valuation of the stock seems detached from the company’s actual business performance. As a result, there is a risk that the stock price will eventually fall back to reflect the company’s true fundamentals.
The future of Truth Social and Trump Media remains uncertain, with experts warning of a potential collapse in stock value once the company becomes publicly traded. Given the lack of evidence supporting the company’s ability to become a highly profitable venture, investors are advised to exercise caution when considering investing in Trump’s media platform. Despite the apparent disconnect between the stock price and the underlying business results, the merger between Trump Media and Digital World Acquisition Corp has proceeded, signaling Trump’s continued foray into the media industry.
As this story continues to develop, there will likely be further updates on the progress and performance of Truth Social and Trump Media in the public market. Newsweek is dedicated to challenging conventional wisdom and seeking common ground on various issues, including the impact of high-profile mergers and acquisitions in the business world. With questions lingering about the sustainability and long-term success of Trump’s media venture, investors and analysts will be closely monitoring the performance of Truth Social following its public listing.
In conclusion, the merger between Trump Media and Digital World Acquisition Corp has raised concerns among experts about the future prospects of Truth Social in the public market. Despite an initial valuation of around $9 billion, some analysts believe that the stock price could plummet once investors begin to focus on the company’s actual business performance. With doubts surrounding the company’s ability to deliver consistent profitability, investors are advised to approach Trump’s media platform with caution. As the story unfolds, more information will likely emerge about the fate of Truth Social and Trump Media as they navigate the challenges of the public market. Newsweek will continue to provide updates on this developing story as experts analyze the potential risks and rewards of investing in Trump’s media venture.
