By now, virtually all Americans are aware that there is a miracle class of modern drugs effective for losing weight. They are a blessing for those with a number of serious medical problems, and have spread into the general population for use to reduce unhealthy obesity, and sometimes for less admirable cosmetic dieting. In the last 5 years, millions of Americans have invested money and time using different members of this GLP-1 Class of drugs, as part of a weight loss program (best managed under proper medical supervision), including Ozempic, Wegovy, and Trulicity). They are usually taken as once per week injections on a prescription basis.
Properly managed these drugs can promote significant weight loss; as much as 20% of a person’s initial weight after 12 months on a program, based on results from clinical studies. In these cases, substantial weight loss is a boon to the patient’s health, overall well-being, and long-term life prospects.
Like all potent prescription medicines, they can have side effects (usually temporary and manageable, though some people can’t continue). The drugs may be taken for long periods (years if needed to control rebound weight gain after the drug is stopped).
What does all this have to do with Your Favorite President, DJT?
Donnie T has been spending much of his time since leaving the White House, when he’s not otherwise occupied in golfing, on a variety of valuable public benefit projects for others like his Gold Sneakers, an Expanded Empire of Red Hats and Slogans (incorporating MAGA, 45 & 47, in a variety of new colors), the Special Lee Greenwood Patriotic Bible, the recent Defiant Bitcoin brand, and his latest new line up of digital trading cards, announced just this week.
Never one to let a financial grift pass by unexploited, Trump has also gifted the rest of us with his clever replacement social media platform, the Truth Social app. Of course, in the beginning (2021) Trump also needed an emergency replacement for Twitter and Face Book after he was thrown off of them (de-platformed is the new lingo), not for being too conservative, but for the offense of leading a violent insurrection to try and undo the 2020 election which didn’t go his way.
The Trump Media and Technology Group Corp (TMTG) came together in late 2021 using a clever Wall Street financial gimmick of merging a SPAC with another entity to get a quick path to a stock market listing. The complicated mechanics of this financial sleight of hand move requires a combination of Wall Street Bankers, Venture Capitalists, and fancy lawyers to imagine, plan, and pull off. For regular folks, it is enough to know that after some ups and downs, insider trading, backroom deals, management changes, and lawsuits, Truth Social gained its proper place trading on NASDAQ with the proud symbol DJT at the end of March 2024.
This was good for Trump as his re-election campaign heated up, since in return for his roughly 60% ownership of the combined financial entity and his 115 million shares of stock, he had promised to post first on Truth Social exclusively.
The bloom has faded just a bit over this incredibly valuable piece of intellectual property as Trump has since made nice with Elon and started splitting his posts between the new Twitter (Musk’s X) and Truth Social. It wouldn’t have much to do with the fact that Trump’s Truth followers are 7.6 million (August 2024), while his X followers are 90 million, since Trump is famously known to show loyalty to his employees, friends and followers. It would just be NASTY to suggest otherwise.
However, Trump has maintained a zealous core of millions of supporters who buy and fund all these ancillary moneymakers. Financial support for Trump Media and Technology Group Corp (TMTG) trading on the NASDAQ since March has been robust, and according to Devin Nunez (late of the US Congress), the current CEO of TMC, almost 700,000 new investors joined the program in buying stock to support Trump’s incorporated endeavor and presumably also add to their financial health and wealth.
As a practical functional business matter, Truth Social (TMTG) is a financial joke.
From Wikipedia:
“The service was launched on February 21, 2022. Since mid-2022, Truth Social has been facing financial and regulatory issues. The application was initially not available on Google Play because of violations of Google policies prohibiting content with physical threats and incitement to violence, but was approved for Google Play in October 2022 after agreeing to enforce policies against incitement.
As of March 6, 2023, it was ranked number 101 in Apple’s App Store rankings for social media apps, and SimilarWeb ranked its website as number 203 in their “News & Media Publishers” category, behind Gab at number 154, but ahead of Parler at number 1,052. Trump estimated in an April 2023 personal financial disclosure that the site’s value ranged from $5 million to $25 million.
Digital World Acquisition Corporation (DWAC), the special-purpose acquisition company formed to fund Truth Social’s parent company TMTG and take it public, disclosed in October 2023 that it was refunding to investors the $1 billion it had raised for TMTG. A November 2023 financial disclosure by DWAC indicated that Truth Social had made a cumulative loss of at least $31.5 million since its inception. In March 2024, DWAC shareholders voted to merge with TMTG, with the merged company trading on NASDAQ under the stock ticker DJT.
In May 2024, TMTG’s regulatory filing for the first quarter of 2024 reported $327.6 million in losses, largely resulting from taking the company public, and $770,000 in revenue.”
And again from Wikipedia:
“Trump Media has not reported the number of Truth Social users. Data aggregator SimilarWeb estimated their number of visitors per month at 5 million in February 2024 and the number of active users in the U.S. at 1 million per month. On March 25, 2024, the day TMTG’s stock began trading publicly, Truth Social had 277,000 U.S. visitors, while Reddit had 32 million.
By April 2024, Truth Social’s daily average of active users in the U.S. had dropped 19% over the past year to around 113,000. During the same period, the daily average of active U.S. users on Twitter/X was down 11% to 34 million, on Reddit up 17% to 31.4 million, and on Threads up 5% to 3.5 million. The number of monthly visits from May 2023 to April 2024 was just over 4 million, down 39% compared to the period May 2022 to April 2023. Trump Media says it does not track traditional performance indicators such as daily or monthly visitor numbers, revenue per user, or ad impressions, saying in their FEC filing that they “might not align with the best interests” of the company or its stockholders.”
Finally, straight from the company itself in TMTG Reports Second Quarter 2024 Results, Closes TV Streaming Deal (TMTG, August 9, 2024):
“TMTG CEO Devin Nunes said, “TMTG has opened the Truth Social platform domestically and internationally, gone public on the NASDAQ, amassed a strong balance sheet with no debt, created its own hardware infrastructure and software system to operate a unique content delivery network, and launched fast, reliable, high-quality TV streaming across the whole Truth Social platform-all, in less than three years since our inception. In addition to our plans to build out Truth+ with an array of new features, we continue to explore numerous other possibilities for growth, including mergers and acquisitions. From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”
The Company had a second-quarter GAAP net loss of $16.4 million. Approximately half the net loss, $8.3 million, comprised legal expenses including costs related to TMTG’s merger with Digital World Acquisition Corp, completed in March 2024. Additionally, the Company incurred $3.1 million of IT consulting and software licensing expenses, primarily related to its software licensing agreement to power its new TV streaming service.
Other significant costs included $828,000 for registration fees for filings with the Securities and Exchange Commission; $602,000 for accounting fees, including the cost of reauditing TMTG’s fiscal year 2022 and 2023 results after the Company secured a new auditor; and $441,000 for other expenses, primarily related to initial fees for TV streaming.
TMTG earned $837,000 in revenue in the second quarter, in addition to recording $2.3 million of interest income.”
To sum up current business conditions, TMTG is losing millions and losing users by the boatload. They don’t track traditional performance indicators. And they just spent more than $500, 000 in the last quarter to correct inaccurate legally required financial reports for the previous two years as their prior auditor BF Borgers was accused of fraud by the SEC and barred from practice. As Trump often says of his personnel choices “only the best people.” Oh dear!
To finish the current business picture: total business revenue for the latest quarter is less than $1 million with a net loss of $16.4 million. In April 2024 the daily user traffic on Truth was 133,000 versus 31 million on Reddit (a robust less than 0.5% ratio).
This is a small taste to foreshadow that Truth Social is not a real business investment in a viable growing company. It is rather a declaration of faith in the Power of Trump. A financial vote of love and loyalty in the hope of a rosy future dollar benefit. In other words, a fabulous Political Financial Meme.
The last figures I found show that TMTG has 201 million shares on the books, of which Trump owns 115 million. Most of those shares were initially land locked (restricted and untradeable) for a 6-month period that ends in September 2024, just 4-5 weeks from now. Starting in late September, regardless of the stock price then, Trump can start selling his shares to redeem the faith and trust of those 700,000 true believers who have invested in him.
As of midday today the stock price for DJT is about $20 per share. So, Trump has an on-paper share in Truth Social of $2.3 billion he will be free to cash in and enjoy shortly (assuming he can keep the stock from crashing if he tries to sell a serious number of shares). Since he owns 58% of all the company shares, this is not a theoretical risk.
Leaving aside Trump’s dilemma of $2 billion plus cashable dollars almost within arm’s reach while he is sitting gingerly in a desk chair backwards balancing on two legs, let’s review the 6-month results for regular passionate Trump investors who are trying to get financially healthy, just as Ozempic users want to be physically healthy.
Let’s say you trusted Trump with $40,000 of your savings or 401K Plan 6 months ago. Your purchase price was $41 per share. In 6 months you have lost 50% of your money. The Action of Trump’s Financial Ozempic. Not such a good result.
Or, let’s say you trusted Trump with $40,000 of your savings or 401K Plan 3 months ago. Your purchase price was $51 per share. In 3 months you have lost 60% of your money. The Action of Trump’s Financial Ozempic. Again, not such a good result.
Or, let’s say you trusted Trump with $40,000 of your savings or 401K Plan 1 month ago. Your purchase price was $30 per share. In 1 month you have lost 33% of your money. The Action of Trump’s Financial Ozempic. Really, not such a good result.
Or, let’s say you trusted Trump with $40,000 of your savings or 401K Plan 1 week ago. Your purchase price was $23 per share. In 1 week you have lost 13% of your money. The Action of Trump’s Financial Ozempic. Nowhere near a good result.
The only thing to say about this Faithful Investment in the Idea of Trump is that the end results are consistent in course and direction. Like using Ozempic the results of faithfully following the plan are substantial losses, week after week, month upon month since the public debut in March.
If you jumped in early to support Trump45 on Truth Social you have lost 50-60% of your commitment. If you came on board more recently your losses are smaller, just 13-33%.
The precautionary message we have learned after 6 months from real life may be that if you stick to the program for the full year, you could lose 100% of your Faith Investment.
That probably isn’t so good for your pocketbook, but it shows that Trump’s Financial Ozempic Action is more powerful than the actual drug which only causes a 20% loss with continued use.
As a regular person, based on actual results, would you be better off today putting your hard earned $40,000 in an FDIC insured guaranteed savings account at 1% interest, or giving your money and support to the latest Trump Potemkin Village financial mirage?
For the most important Person in the Room, the real issue is how to quietly transfer $2 billion in cash from OPM (Other People’s Money) and not wiping out the stock price while he’s doing it. Is it possible there are another 700,000 True Believer suckers to take the bait?
Maybe Trump can monetize the Original Art of the Deal book cover suit by offering up genuine 1” by 3” swatches to sweeten the deal for new investors only (just $5,000 or more to join the select few).
For a practicing Christian, particularly a conservative right-wing Catholic fundamentalist (say JD Hymel Vance for instance), this would not be so different than partitioning the Holy Relics of the Chosen One.
For the rest of us, a scam avoided is money in the bank.
References
GLP-1 agonists: Diabetes drugs and weight loss (Mayo Clinic, accessed August 28, 2024):
https://www.mayoclinic.org/diseases-conditions/type-2-diabetes/expert-answers/byetta/faq-20057955
TMTG Reports Second Quarter 2024 Results, Closes TV Streaming Deal (TMTG, August 9, 2024):
https://ir.tmtgcorp.com/news-events/press-releases/#b2iLibScrollTo
https://en.wikipedia.org/wiki/Truth_Social
https://thehill.com/homenews/campaign/4850705-trump-returns-x-social-media-platform/