The Truth Social network made millions of dollars in profits despite the fall
The Truth Social network made millions in profits as its shares rose sharply on the stock market.
The Truth Social network made millions in profits and has become a kind of golden goose for Donald Trump.
Defying economic logic, Trump Media & Technology Group (TMTG), a company with bulging losses and almost no revenue, is worth a bundle on the stock market.
As a result, this Tuesday, April 23, the Truth Social network made millions in profits and is set to trigger an additional award for the former president.
As the stock has traded so high, Trump will be entitled to receive an additional 36 million shares.
At TMTG’s current stock market price, that amounts to a bonus of about $1.2 billion (more than 1.1 billion euros). The fine print, however, prevents it from cashing out until a few months from now.
The value of these shares is in addition to the 78.75 million shares he already held.
As such, his stake, which now amounts to approximately two-thirds of the company’s capital, is valued at a market price of around 3.8 billion dollars.
Speculation is driving the share price up and down like a roller coaster. Despite this, Truth Social network made millions in profits, but fell by more than 8%.
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The Truth Social network made millions of dollars
Even so, after almost a month of trading and with strong trading volumes, although the price defies logic, it cannot be ignored that there is demand willing to buy the shares at prices that have little to do with the company’s economic fundamentals.
It is worth remembering that, despite the fact that the Truth Social network made millions of dollars in profits, the bubble has been deflating since the peak of 79.38 dollars at the end of March.
The share price fell to $22.55 last week, but from there it has rallied strongly back to around $33 today.
Although he has some cash flow problems as a result of his convictions in fraud and defamation cases and the multi-million dollar legal fees he is facing from his civil and criminal trials, Trump is richer than ever, at least on paper.
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Notably, the former president has used donations from supporters to his political action committees to cover his personal legal expenses.
The stock bonus that the former president has now achieved is generated by having traded Trump Media & Technology Group (TMTG) shares for 20 sessions above $17.50 since the social network went public.
It came to market just a few weeks ago through a merger with Digital World Acquisition Company (DWAC), a special partnership created to address a corporate transaction.
When the initial merger agreement was signed in October 2021, the agreement provided that TMTG stock had to trade above $30 for Trump to get the full bonus.
DWAC and TMTG amended the agreement in August 2023 to lower that threshold to $17.50, which has now allowed Trump to receive the 36 million share award (provided he doesn’t suffer a hecatomb in the remainder of this Tuesday’s session).
TMTG, which owns Truth Social, had revenues of just $4.1 million through the full year 2023.
The company suffered a loss of $58.2 million, partly weighed down by the interest burden on its debt. With the merger with the DWAC partnership, Trump’s company accessed its liquidity of about $300 million.
With the debt repaid, the company now has more than $200 million in cash.
The company has not disclosed the number of users, but claims it has achieved “a total of approximately 8.9 million signups on Truth Social across iOS, Android and the web,” although that figure does not equate to the number of active users.
