Former President Donald Trump’s social media platform, Truth Social, is set to become a publicly traded company on Tuesday, March 26, 2024, under the ticker symbol “DJT” on the Nasdaq stock exchange.
This comes after shareholders of the special purpose acquisition company (SPAC) Digital World Acquisition Corp. (DWAC) voted on Friday to approve a merger with Trump Media & Technology Group (TMTG), the parent company of Truth Social.
The platform’s popularity can be attributed to several factors. Some what we know are as follow.
8 Reasons Why Trump’s Truth Social is Gaining Popularity
- Donald Trump’s Popularity: Trump’s presence on the platform attracts a large number of users who are interested in his content and opinions.
- Alternative to Mainstream Social Media: Many conservatives see Truth Social as an alternative to mainstream social media platforms like Twitter and Facebook, which they perceive as hostile to their point of view.
- Free Speech Platform: Truth Social positions itself as a platform for free speech, which appeals to users who value open and uncensored discussions.
- Political Campaigning: As Trump runs for president again, Truth Social serves as a platform for his campaign, providing a direct line of communication with his supporters.
- Merger with Digital World Acquisition Corp. (DWAC): The merger with DWAC gave Truth Social access to over $300 million, which is crucial for the growth and development of the platform.
- Investor Interest: The hype surrounding Trump’s political comeback and the potential for the platform to thrive if Trump’s popularity remains high have attracted investors, driving up the stock price.
- Market Valuation: Despite the platform’s financial struggles, its market valuation is high due to the speculation around Trump’s political prospects and the potential growth of the platform.
- User Experience and Content: While the platform has faced criticism for its clunky interface and technological issues, its content, which is often pro-Trump and conservative-leaning, attracts a specific user base.
Financial Performance and Challenges Truth
Social’s user base is estimated at around 5 million active users, which is relatively small compared to established social media giants.
The platform has struggled financially since its launch in February 2022, generating only $3.3 million in revenue in the first nine months of 2023 while racking up tens of millions in losses.
DWAC’s stock has behaved like a “meme stock”, with prices surging based more on online hype and speculation around Trump’s political prospects rather than business fundamentals.
Similar in Tech: Grok-1 Open Release: How to Install and Use It?
Post-Merger Restrictions and Future Prospects
Trump and other TMTG insiders are restricted from selling shares for six months post-merger.
However, if Trump’s popularity holds up, it could provide the former president a substantial boost to his net worth even if the stock price declines from current levels over time.
The newly public company will face scrutiny as it will be required to disclose more financial details and material news as a publicly traded entity.
In the whole, Truth Social’s public listing via the DWAC merger signifies a pivotal moment for Trump Media & Technology Group.
Despite uncertainties surrounding its financials and user base, the platform’s Nasdaq debut as “DJT” presents a mix of prospects and hurdles.
Success as a publicly traded entity hinges on effectively managing competition, financial viability, and shareholder value amid ongoing scrutiny and market conditions.
