Donald Trump defended his social media platform Truth Social amidst criticism and skepticism about its parent company’s inflated stock price. Trump accused detractors of being “Radical Left Democrats” and emphasized the importance of the platform in getting his message out. The platform is also seen as a potential financial windfall for Trump, who owns a significant stake in the company. However, the stock’s volatile nature and Trump Media’s long-term business plan have raised concerns among skeptics, leading it to become the most expensive stock in the U.S. to sell short.
Despite Trump’s endorsement, Truth Social’s success is closely tied to the status and relevance of Trump himself. The company’s market cap is around $6.2 billion, but Trump faces political, legal, and financial challenges that could impact his standing as a public figure and the value of Trump Media. The company has chosen not to disclose key performance indicators, citing a focus on long-term goals, which may not align with reporting such metrics.
Trump acknowledged that his following on Truth Social is considerably smaller than on larger rival platforms such as X, where he had over 87 million followers before being banned following the Capitol riot on January 6, 2021. Trump, who has approximately 7 million followers on Truth Social, noted that the platform is growing rapidly and performing well. Despite this growth, the platform’s user base of 5 million visits in February pales in comparison to Facebook’s billions of monthly active users.
The stock price for Trump Media, trading under the ticker DJT, has been volatile since its debut on the Nasdaq. After reporting a net loss of $58.2 million on revenue of $4.1 million in 2023, the stock plummeted by 21%. The company’s reluctance to disclose key metrics has raised concerns among investors, leading to uncertainty about its long-term prospects. Short sellers have faced high borrowing costs to bet against the stock, indicating skepticism about its valuation.
Trump emphasized the effectiveness of Truth Social as a platform for getting his message out, despite its smaller reach compared to other social media giants. He expressed confidence in the platform’s potential for growth and success, attributing its appeal to the ability to connect with his supporters. However, ongoing challenges facing Trump as a public figure and uncertainties surrounding Trump Media’s business plan may impact the company’s future performance and valuation. Despite Trump’s endorsement, Truth Social still faces skepticism and scrutiny from critics and investors alike.
