Trump Media Roller Coaster: Ride Its Ups, Downs, And Spin

Under what circumspect standards can any one view Trump Media & Technology Group as a possible viable media business?

Think of a theme park spin. Take a costly ride, yell and scream -- and get nauseous.

"It's a scheme, it's not really a company," said Dan Nathan, chief executive officer/co-founder of RiskReversal Advisors on MSNBC on Monday. "It's a platform for him once he got kicked off of Twitter and Facebook." 

Trump Media posted a grand total of $4.1 million in 2023 with a virtual majority coming from advertising sales-- and losing $58 million in the process.

And yet now it has a valuation of $6.6 billion?

Should we believe that anything has a certain “value” level as defined by those who buy in -- at whatever price the marketplace desires?



Just over $4 million dollars in a year for a publicly traded media stock -- with the company's own admission it will continue to lose money in the periods to come? 

The business is largely pinned around the mumblings of a less-than successful business executive who knows how to make a buck -- an executive who lost money on owning a gambling casino (virtually unheard of) -- now bucking for another term as the highest person for political office in this country.

Wait. It gets worse -- or just confusing. A year before, Trump Media  -- which owns the social media Truth Social app -- made an even more microscopic $1.47 million -- while yet making a net profit of $50.5 million. (Huh?).

If this is a business, define business. 

It's essentially one guy yapping about stuff on a social media platform -- with tons of misinformation and lies.

Where's the value here? Entertainment, maybe.  Okay, have a laugh. And sell a bit of advertising around it -- emphasis on the word "bit."

So why the nearly $7 billion valuation? Investor partisans for the ex-President are definitely involved on whatever principles surround him -- including freedom of speech. 

But largely, according to many, it's a "meme" stock -- a reference to companies pushed from the most speculative young investors via social media with little regard to whether the company makes or loses money. Some would say it's essentially gambling.

Veteran market analysts have seen this over the recent years with companies in 2021 such as GameStop and AMC Theaters -- basically, companies in industries on the wrong side of growth curve.

Add in the drive of investor boredom looking for a thrill ride.

“TMTG [Trump Media & Technology Group] expects to incur operating losses for the foreseeable future,” says an SEC filing by the company.

After running up its stock price --  around double that of its IPO starting price -- the new publicly traded company saw its stock cratering 25% on Monday, to close at $48.66.

Define this business: A foreseeable long-term money-losing social media platform of questionable, sometimes entertaining value with around 5 million monthly users.

The uninformed may also be asking: "Hey, advertisers. Why are you buying in? After all, it's the former President who is at times tied with President Biden in the polls."  Stock market analysts know why.

"You can't be a scheme," says Nathan. "You can't be a money losing scheme for one shareholder which is Donald Trump... On Wall Street, gravity always wins out." 

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