Truth Social is a perfect example of the myth of Trump’s wealth. On paper it says he is worth 3.5 Billion Dollars but when you actually look at the details it is all worthless.
First, experts say the market is drastically overvaluing Trump Media based on the company�s fundamentals.
The stock price is clearly a bubble. No rational investor would take the stock at face value, especially if they had to hold it for any length of time.
SEC filings indicate Trump Media�s revenue amounted to just $1.1 million during the third quarter. The company posted a loss of $26 million that quarter.
The other bad news for Trump is that this stake is not as liquid as it sounds. Those paper gains would be very difficult for Trump to translate to actual cash.
In fact, Trump�s shares in this company are in many ways even less liquid than his real estate holdings.
That means Trump would have a hard time dumping the stock or even pledging it as collateral.
Truth Social has a shrinking user base
The number of Truth Social�s US monthly active users on iOS and Android is down 39% year-over-year, according to Similarweb data shared with CNN earlier this month. Truth Social remains much smaller than X (formerly Twitter), which is also shrinking but at a slower pace.
And yet Trump Media is being valued north of $6 billion on a fully diluted basis, which includes all stocks and options that could be converted to common stock, according to Jay Ritter, a finance professor at the University of Florida.
Ritter said the current market price is hard, if not impossible, to justify.
�It is grossly overvalued,� said Ritter. �It qualifies as a meme stock for which the price is divorced from fundamental value�Meme stock investors are usually buying on the basis of the greater fool theory of investing: It is overvalued today, but I hope to make money selling it to an even greater fool tomorrow at an even higher price.�