Truth Social is a social media platform whose primary owner is former President Donald Trump.
A group of early investors say they want to “end Big Tech’s assault on free speech.” Achieving this will likely require a rapid expansion of the user base, but it’s not clear yet.
The public has limited access to Truth Social’s usage data, which drives ad sales, a key metric for Truth Social’s success. The company declined to disclose its usage data to CNBC when reached for comment.
Truth Social’s parent company, Trump Media & Technology Group, is the product of a blank-check merger with a special purpose acquisition company (SPAC), which was completed in March 2024.
The business formation strategy and enthusiastic launch on the public markets could provide financial benefits to Trump ahead of the 2024 election. As of July 2024, Trump holds 114,750,000 shares of TMTG common stock, Accounting for approximately 65% of the company. He could sell some of his shares as early as September, potentially earning him billions before Election Day.
The former president is also entitled to up to 4,061,251 warrants, each of which is redeemable for one DJT share.
In July 2024, the stock was trading at about $33 per share, higher than the $10 share price of an early backer of the project (then known as Digital World Acquisition Corporation). Investors have kept the company afloat amid low revenue and huge losses.
“The stock price is explained more by the meme stock phenomenon,” said Michael Klausner, a professor of law and business at Stanford Law School. The term “meme stock” refers to the sudden popularity of Businesses, especially on social media, have led to high stock prices and heavy trading volume.
Trump Media & Technology Group’s filing with the U.S. Securities and Exchange Commission cited various risks, including that the group may not be able to fulfill its promises to attract users and advertisers. At the same time, the platform is trying to expand its U.S. user base.
watching video Learn more about Truth Social and its parent company, Trump Media & Technology Group.
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