Truth Social is Doomed to Become Penny Stock
Originally posted by Robtard
Trump Media and Technology has now made Trump worth over 6.5billion, on paper.Like everything Trump, it's seems like another house built on a foundation of sand. Trump's eager to sell massive amounts of his stock to cash in while the stock valuation is still high, despite Truth Social losing money, but he's restricted for 6months unless the board approves.
This is definitely going to end with Trump getting his filthy lucre, while investors are left emptied.
Truth Social—the Trump-owned social media platform that started trading yesterday—currently has far fewer users and less income than any social network that has gone public before. While it does sell some ads, its business is practically non-existent. Truth Social earned $3.4 million in revenue for the first nine months of 2023 and it lost around $49 million. Facebook earned $3.71 billion the year before it went public and was profitable.
For now, Truth Social is trading like a meme stock, meaning its market value is completely divorced from its financial reality. But once retail investors tire of the penny stock, its fate will be left to institutional investors who want to see high-growth opportunities and profit margins. Meme stocks like GameStop and AMC that soared during the pandemic-era retail investor bump have since crashed.