this post was submitted on 22 Mar 2024
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Trump is about to get $3 billion richer after deal is approved to take his company public. But it won’t solve his cash crunch | CNN Business (edition.cnn.com)
submitted 7 months ago by [email protected] to c/[email protected]
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Investors have approved a deal on Friday to make Truth Social owner Trump Media a publicly traded company. The green light from shareholders clears the final major hurdle for a long-delayed transaction that will generate a multi-billion dollar windfall for former President Donald Trump at a time when he’s facing immense financial and legal pressure.

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[–] [email protected] 4 points 7 months ago

The number of Truth Social’s US monthly active users on iOS and Android is down 39% year-over-year, according to Similarweb data shared with CNN earlier this month. Truth Social remains much smaller than X (formerly Twitter), which is also shrinking but at a slower pace.

And yet Trump Media is being valued north of $6 billion on a fully diluted basis, which includes all stocks and options that could be converted to common stock, according to Jay Ritter, a finance professor at the University of Florida.

Ritter said the current market price is hard, if not impossible, to justify.

“It is grossly overvalued,” said Ritter. “It qualifies as a meme stock for which the price is divorced from fundamental value…Meme stock investors are usually buying on the basis of the greater fool theory of investing: It is overvalued today, but I hope to make money selling it to an even greater fool tomorrow at an even higher price.”

This is the story of Trump's entire life.