- Trump’s media company debuted on NASDAQ on Tuesday following the merger
- Trump’s net worth increased by an astonishing $4 billion
- The share price is 2,000 times company turnover last year
Donald Trump’s new media company ended its active first day of trading valued at $8 billion – more than established companies like the New York Times and Mattel – amid warnings that investors were putting their money on Trump rather than the company itself.
At one point, during the heat of the first day of trading on the NASDAQ, the company that owns Truth Social was valued at $10 billion — despite revenue of just $3 million in the first nine months of last year.
Even after the stock price cooled to $57.99, the company was worth more than companies with many users and established track records.
The Times, founded in 1851 and reported at the company’s public trading debut, which estimated its value was greater than Barbie maker Mattel, at about $7 billion.
The share price is about 2,000 times sales.
Former President Donald Trump’s media company was valued at $8 billion at the end of trading on Tuesday, following its debut on the NASDAQ
Online message board Reddit, which had its own splashy debut a few days ago, has a similar market capitalization but boasts 268 million active users. Its value was less than ten times sales.
Watchdogs are already warning that Trump’s huge stake in the company presents an opportunity for influence, even beyond the ethical issues raised when he decided not to sell his empire when elected in 2016 or place assets in a blind trust.
“Truth Social also missed its expected user base by an order of magnitude. It’s not a successful company. It’s not a company that seems to have a plan for success to make money. It’s really just a meme,” said Jordan Libowitz of Citizens for Responsible Ethics in Washington.
“So it’s all based on what people are putting money into,” Libowitz told DailyMail.com.
“It’s not really Truth Social, they’re investing in a potential future president. The United States – its wealth – is determined by whether people buy or sell shares. Now a foreign investment fund like Saudi Arabia or Qatar can buy up a bunch of it, increase its net worth, threaten to sell it at net worth, and have an extreme amount of influence over the president of the United States.”
Shares rose again after closing at $57.99 on Wednesday. Its value is approximately 2,000 times sales
Watchdog groups warn of potential opportunities for influence now that the president’s wealth is tied to the company
Trump continues to rely on his fans not only for potential votes — he leads in the polls against President Biden — but also for campaign contributions to pay his legal bills and other purchases. On Tuesday he started selling Bibles featuring American singer Lee Greenwood’s God Bless.
There are approximately 9 million Truth Social account holders, but only 5 million active users. The former Twitter, now X, which Trump reinstated after suspending his account after January 6, has 550 million.
While public market purchases may be a blunt instrument, the dollars at stake are far greater than when Trump was under scrutiny for foreign governments, embassies and companies booking rooms at his former luxury hotel in Washington, D.C. while he was in the United States. White House.
Trump’s staggering financial gains from the public offering come as his legal bills and court rulings pile up. An appeals court in New York this week gave him 10 days to pay a $175 million judgment in his fraud case while he appeals.
Trump’s shares are currently locked up, so he can’t sell them for six months unless a corporate board full of loyalists votes to allow it. But that could subject board members to potential shareholder lawsuits if the move is seen as sacrificing the company’s value.
