Truth Social, Donald Trump’s social network, goes public at a price of $9.5 billion

The market’s verdict, at least provisional, is in: the Trump Media & Technology Group, which owns Donald Trump’s social network, Truth Social, is worth $9.5 billion (€8.7 billion). As a result, Donald Trump, who owns 58% of the whole, saw his fortune jump by around $5.5 billion on Tuesday March 26. This financial magic can be explained by the merger of Donald Trump’s network and an empty shell listed on the stock exchange, Digital World Acquisition Company (DWAC), which raised $293 million in capital in the summer of 2021.

The valuation on Nasdaq of the new group, listed under the acronym DJT, like Donald John Trump, is astonishing: the media company is, of course, headlined by Donald Trump, former reality TV star and potential president of the United States. United, but its number of visitors has been halved in one year (around 500,000 per month).

In the first nine months of 2023, Truth Social had $3.3 million in advertising revenue and a net loss of $49 million. A micro-SME without growth linked to 78 years of glory! Introduced two and a half years ago, at $10 per share, the former DWAC was trading over $70 on Tuesday morning, but was very volatile. The operation had been delayed due to multiple conflicts, when everything accelerated: general merger meeting, Friday March 22, and listing on Nasdaq.

Reputation as a deadbeat

The case dates back to February 2021. Donald Trump was banned from all social networks, notably Facebook and Twitter, after the assault on the Capitol on January 6, 2021, and no longer has a media spokesperson. The outgoing president was then contacted by two former participants of his show, “The Apprentice”, Wes Moss and Andy Litinsky. The two men want to create a conservative media with Donald Trump.

They presented him with a project aimed at “create a conservative media powerhouse that will compete with progressive media and fight Silicon Valley’s “Big Tech” companies”. The agreement is concluded: Donald Trump will have 90% of the whole, and the two partners 8.6%, a lawyer in charge of the agreement, Bradford Cohen, recovering the remaining 1.4%.

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Donald Trump has no money and limited access to credit due to his past bankruptcies and reputation as a deadbeat. But the obstacle is surmountable: the financial world is in the middle of a speculative bubble, with “free money” distributed by central banks in the midst of a health crisis. Wall Street is seeing empty shells flourish, already listed on the stock exchange and stuffed with money borrowed at zero interest: these are Special Purpose Acquisition Companies (SPAC), acquisition companies with a specific purpose, that is to say companies desperate for projects.

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