Posted by paulpauper 10/28/2024
As just a stock, it's beyond worthless - the company is valued at billions of dollars but their net revenue doesn't even break a million dollars. Trump media makes less money than a used car lot.
However, if you are a proponent of Trump and want a general way to speculate or "buy in" to what is is doing. Or... perhaps you want an off-the-books way of showing loyalty and currying favors, you don't want to contribute to him you could have your company buy a bunch of his shares and skirt any campaign finance restrictions.
> Or Dan Primack writes today that “it’s not possible to even pretend that the equity value has any relation to the underlying business. At this point, owning TMTG is basically an in-kind donation to Donald Trump. Both financially and reputationally.” Yes! A lot of people want to associate themselves with Donald Trump, and also for some reason want to make him richer, and Trump Media’s stock is a quite straightforward way to do that. Why does it have to have any relation to the underlying business?
> Back when the Trump Media special purpose acquisition company deal was first announced in 2021, the stock jumped, and I pointed out that there was not a single dollar sign in the investor presentation. I said:
>I think that a more realistic valuation method here is not to worry about cash flows at all — as Trump SPAC clearly does not — and treat the stock simply as a token of public interest in Donald Trump. My guess is that the price of Trump SPAC stock will not, for instance, be much affected by its earnings announcements, unless Trump himself does the earnings calls in which case it will go up no matter what he says. … My guess is that each day that goes by without Trump news, the stock will go down a bit. My guess is that the stock is essentially a bet on Trump’s personal newsiness, on Trump-news volatility.
From a different newsletter:
> And the story makes the reasonable point that, if Donald Trump becomes president again and you want to bribe him, Trump Media gives you some good ways to do so: A really ambitious bidder could try to acquire the company and cash out Trump’s multi-billion dollar stake, but even short of that you could buy stock to show your support, buy advertising on Truth Social, etc. If you’re an institution, your stock ownership would be public, so Trump could see it and be grateful.
There are 200m shares outstanding. The company has $300m in cash, is losing $100m a year, and a return on equity of -250%. They also have no appreciable market penetration for any of their services. In a vacuum we'd be talking about a stock that should be trading < $1. So yes, it's not completely worthless, but there is not a rational argument to be buying it at $45 a share.
Trump has been a public figure for many years now and exclusively posted on Truth but money failed to come in, I don't see how a Trump Presidency will change that, also considering he would not need to win anymore he'd probably just slack and collect corruption fees through his LLCs
So his stock can be used as both
a) a bribe, and
b) a way to bet on bribes
Trump has many properties where you just pay him just by staying there.
I don't think it's a simple as that. You can't just say "this guy is in the news a lot - that's worth $xxx". If anything, you should invest in media companies in general who do the coverage if you want to make that bet.
> The hardest part of launching any service is getting the userbase. This typically requires tons of advertising; Trump has this covered.
DJT has already launched a service. If you take them at face value, they already have a lot of users. But it's still not making any money.
Statistically speaking this will be very soon as he's a fat 78 year old man who by fairly credible reports stuffs himself full of fast food and amphetamines regularly and is clearly in mental decline and won't release his medical records.