Tech

Truth Social Can’t Become the Next GameStop the Meme Way


exist Reddit Like Truth Social, users have been trying to recreate the magic of meme-stock Trump Media & Technology Group— the company behind Truth Social — has fueled growth for companies like GameStop in 2021. So far, they have been less than successful.

truth societyThe Twitter imitators of former President Donald Trump lacked two essential elements in the narrative of previous campaigns: fundamentals and the foil of institutional investors.Big hedge funds have gone short game station, betting that prices will fall. This time, the stock is largely held by retail investors.

Unlike other social media companies, Truth Social doesn’t disclose how many users it has, but has previously said the site has just 9 million registered users; . 3 billion Number of monthly active users on Facebook. Visits to TruthSocial have dropped from 5.4 million in January to about 5 million in February, according to data from web analytics firm SametimeWeb. The site’s lack of users resulted in poor financial performance.

On the r/wallstreetbets subreddit, home of the meme stock booster, most users don’t buy what Truth Social is selling.

“If you invest in this long enough, you’re going to lose everything. So it’s strictly a sports game,” wrote Reddit user Rich4718. “If you think Donald Trump is going to create a revenue-positive social media platform, you’re an absolute idiot.”

The company began public trading on March 26 under the stock code DJT, and its stock price has subsequently fluctuated significantly. On Monday, the stock fell nearly 20%, wiping $2 billion off its market value.

In a filing Monday, the company said it had revenue of just over $4 million and a net loss of $58 million. This follows a shocking admission from the Trump Media and Technology Group’s auditors that the company’s losses “raise significant doubts about its capabilities.” Go on,” According to documents filed with the U.S. Securities and Exchange Commission March 25th.

However, despite reporting these huge losses, the company is still valued at approximately $7 billion. The valuation is supported in part by Trump fans, who see investing in the company as a way to support the former president. In some cases, these investors hold a sincere belief that Truth Social can become a major social media player.

Albert Choi, a law professor at the University of Michigan, said investors in Trump media may be motivated by factors outside of traditional financial logic, such as using hype to drive up prices.

“If that’s your main motivating factor, then you won’t care too much about whether the company actually makes money,” Cui said.

Reddit user autsauce, who declined to give his real name, told Wired: “I believe DJT is an investment in Donald Trump, not just an investment in Truth Social. If market participants start asking this question (I bet they will do it), they will do it.” Truth socialization in silos may be valued at a very different price. “

Choi noted that a Trump presidential victory could actually hurt the company’s stock, as investors believe the need to financially support the former president through investments may diminish.

“My guess is that interest in the stock will essentially disappear,” Cui said.



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