The enormous success of the Truth Social platform in the stock market is associated with breathtaking risks and conflicts of interest, but it also belies Donald Trump’s alleged bankruptcy. The man is a phenomenon.
How often in recent weeks has there not been gloomy speculation about whether Donald Trump’s proud New York business empire is on the verge of collapse despite the former president bragging that he possessed hundreds of millions of dollars in liquid assets?
He was unable to meet a $454 million judgment or post a bond on appeal in his civil fraud case for the penalty imposed in February by New York Judge Arthur Engoron, who ruled that Trump grossly overstated the values of his real estate fortune. Will New York Attorney General Letitia James move to confiscate Trump’s properties?*
But overnight, Trump’s personal wealth is estimated to have skyrocketed from $2.5 billion to $7 billion. The former president is not a “Broke Don” as his presidential campaign opponent Joe Biden claimed in a speech last weekend. Biden’s rather weak attempt to imitate Trump’s use of sarcastic names to belittle his political opponent is a complete flop.
Truth Social Is Almost Nothing but Trump
Shares in the social media platform Truth Social, which Trump and his allies launched in early 2022, were traded on the New York Stock Exchange for the first time on Tuesday. The company is valued at around $8 billion, and Trump owns 60% of the company. Mathematically speaking, this comes to about $4.5 billion that will be added in one lump sum to Trump’s fortune, a fortune that so far has only been based on concrete and steel. The man is transforming himself from a somewhat shady New York real estate mogul into a shiny tech billionaire who can make money from almost nothing.
If one takes the hard economic facts at face value, then Truth Social pretty much amounts to nothing. The company reported sales of $3.4 million in the last nine months of 2023 with an annual loss of $49 million. With about 9 million registered users, Truth Social has a tiny share of the social media market. Market leader Meta (owner of Facebook, Instagram and WhatsApp) alone has more than 3 billion users. The valuation can hardly be explained in economic terms.
The shares also come with considerable risk. Truth Social’s appeal depends on the cooperation of a single man because, should Trump suddenly stop posting content, then Truth Social would essentially be dead. If Trump does not get reelected in the fall, then interest in his posts, and by association, in Truth Social itself, will likely dwindle. Not to mention the breathtaking conflicts of interest that exist when a future president can bolster his private fortune with every public announcement on his own internet platform.
But that’s exactly what makes Trump so successful and why the desperate attacks of his opponents amount to nothing. He is a media superstar who can easily reach, touch and inspire a large portion of the public. He is a brand whose unrestrained marketing not only brings him millions, but has already taken him to the White House once before. This was already the case before the presidential election of 2016, when Trump’s income mainly came from TV appearances and brand rights. With the success of Truth Social, Trump is taking his strategy for success to new heights.
Now, After Golden Sneakers Come Shares
Will Trump’s marketing talent take him to the White House a second time? The race isn’t over yet, but it’s clear that the Democrats’ attempts to damage Trump’s aura as a successful entrepreneur and to fight back in this way are doomed to fail. New York Attorney General James dragging Trump’s bloated real estate valuations into the public eye? Judge Engoron cornering him with an astoundingly high fine? Democrats speculating over the financial shortfalls of Trump’s presidential election campaign because of his high legal costs? They’re all irrelevant. Trump’s fans love him and are willing to pay the cost for their loyalty — in addition to donations, red caps and gold sneakers, they now have shares of Truth Social at their disposal.
Whether the U.S. and the rest of the world want an alchemist in the White House is a different question. But it’s a political question. Democrats need to fight Trump with far better policies, not with pathetic attempts to damage his economic reputation.
*Editor’s Note: On March 25, a New York appeals court reduced the amount Trump must post as bond pending appeal to $175 million.
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