Who knew you could make billions of dollars off a Mastodon instance? Even Donald Trump and his people couldn’t have imagined that Truth Social would become the monster it is today when they launched just over two years ago. Just look at these numbers for Trump Media & Technology Group (DJT) at the end of trading on Monday, April 15:
- Market cap: $3.63 billion
- Share price: US$26.61
Those are some big numbers. Back in October 2021, eight months after Trump Media was incorporated, stocks were trading at just under $10. And that 10-figure market cap? The one that ballooned after Truth Social went public last month by merging with Trump Media? That’ll buy a lot of hamburgers.
But not as many as it could in March. As you’re no doubt well aware, Trump Media does no so much fly as plummet; DJT’s stock price was $70.90 on March 26, the day they went public, and their market cap was over $9.5 billion.
Why are Trump Media and Truth Social tanking? And will Donald Trump stay a billionaire if this keeps up? Is it worth it to invest, or even bet on it at the top betting sites? Pertinent questions indeed. Let’s find out.
What Is Trump Media?
Trump Media & Technology Group (TMTG) was founded on February 8, 2021 by Andy Litinsky (aka Andy Dean, the talk show host) and Wes Moss, both former competitors on Trump’s reality show The Apprentice back in 2004. Trump owns 57.6% of the company, which reportedly had 36 employees in 2023.
With the help of Chinese interests – including ARC Global Investments II, which owns 6.9% of Trump Media – TMTG was able to raise some cash and start putting out product, including on-demand programming under the TMTG+ banner, and a social network that Trump could use as his bully pulpit.
What Is Truth Social?
Based on the open-source code that powers Mastodon, Truth Social was founded on October 20, 2021 and launched on February 21, 2022. Trump had been banned from both Twitter and Facebook at the time, following the January 6 attack on the U.S. Capitol; Litinsky and Moss are said to be the brains behind the operation.
The same Chinese money that was helping to float Trump Media was used to get Truth Social off the ground – along with additional help from Russian interests, according to a December 2021 report by The Guardian.
Also on board: Luiz Phillippe, one of former Brazilian president Jair Bolsonaro’s allies. Phillippe was named CFO of Digital World Acquisition Corp. (DWAC), the shell corporation that merged with Trump Media in March 2024. Did I mention that Marjorie Taylor Greene (R-Georgia) became a DWAC shareholder after the merger was first announced in October 2021?
Why Is Truth Social Sinking?
It’s not very good. The product itself is weak, and completely overshadowed by Elon Musk purchasing Twitter (now branded “X”) and restoring Trump’s account. And the entire arrangement with Trump Media is beset by legal troubles – including lawsuits by Litinsky and Moss, who were then counter-sued by Trump.
Mostly, though, it’s because so many Trump supporters were keen to “invest” their money in their chosen hero. DJT was and remains a classic meme stock; its $70.90 price on March 26 was based on political hot air, not sound business practices.
Trump’s Truth Social is sinking. 🤣 pic.twitter.com/FnAKOai3GA
— ᗰᗩƳᖇᗩ ℙ𝕙𝕠𝕥𝕠𝕘𝕣𝕒𝕡𝕙𝕪 (@LePapillonBlu2) April 14, 2024
Is Trump Getting Rich Off Truth Social?
Only on paper. Trump has to wait until six months after the March 26 opening to sell any of his shares – that would be September 26, if I’ve done the math correctly.
This means that Trump wasn’t able to use what’s left of this windfall for the $175-million bond he needed to post in order to stop the State of New York from immediately collecting on that $355 million (plus about $100 million in interest) in penalties Trump was assessed in his civil fraud case. That bond was eventually posted, but a hearing is scheduled for April 22 to determine whether Trump can actually “make good” on the payment.
In the meantime, I know what you’re thinking:
Can Donald Trump Short His Own Stock?
That would indeed be epic – but instead, Trump Media filed an S-1 document on Monday with the U.S. Securities and Exchange Commission, which would convert warrants held by DJT investors into yet more shares of stock. The filing also sets the table for that stock to be sold – as well as all of Trump’s stock, and that of other company insiders.
You could short DJT yourself, of course, but shorting comes with all sorts of risks. And there aren’t many shares left to short, so you have to pay insanely high fees to borrow it, something like 300% as of April 7. Oh well. There’s always index funds, right?
