Finance

Donald Trump Selling Truth Social Shares Would Be A Legendary Hedge Against Losing The Election

All he has to do is hack his supporters off at the knees.

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ABC News Hosts Presidential Debate Between Donald Trump And VP Kamala Harris At The National Constitution Center In Philadelphia

(Photo by Win McNamee/Getty Images)

Social media companies have only ever been able to successfully monetize their operations in one way: addicting large numbers of us to their platforms so that they can stick as many advertisements as possible in front of our eyeballs. That old reliable model was never going to work for Donald Trump’s Truth Social platform.

Because Truth Social does not report numbers about its own user base, it is difficult to estimate exactly how many people log on to be among fellow right wing social media users. That being said, one third-party digital intelligence company put the high point for active daily users on Truth Social in 2024 at 124,852 in late March, coinciding with the hype over Truth Social’s parent company Trump Media & Technology Group going public. Although it was a high for 2024, this was nonetheless a decline from the all-time highs for Truth Social visits reached in 2022, and user interest has continued to drop off since the company went public.

To give you an idea of how that stacks up compared to other social media companies, as of early 2024 TikTok had more than 400 times as many active users as Truth Social. Facebook had about 600 times as many active users.

Given that anemic user base, it is no surprise that Truth Social has reported staggering losses. Truth Social’s parent company bled $328 million on revenues of approximately $771,000 during the first quarter of this year. Trump Media & Technology Group did better in the second quarter, but still lost $16.4 million with only $837,000 in revenue.

The fate of Truth Social seems to be tied to Trump’s prospects of regaining the presidency. Though the overall momentum of the DJT stock has been decidedly in a downward direction, there have been notable upticks in the share price following events perceived as being good for Trump’s prospects in November.

This includes (for some reason) the two assassination attempts: DJT shares shot up by 50% immediately after the Pennsylvania shooting, finishing the trading day up by 31%, while shares reacted in a more muted fashion (climbing 5% in premarket trading before swiftly falling back down) to the latest “assassin-hiding-in-the-bushes-at-the-golf-course” plot. It is not totally clear why DJT traders think that multiple people wanting to kill Trump is a good thing for him politically, or why Trump winning the presidency would help Truth Social become profitable (when he was president, Trump routinely propped up his hotel business by deciding to visit his own properties at taxpayer expense with a huge retinue of Secret Service agents and hangers on, but that won’t work with a digital space like Truth Social).

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Now DJT stock is on the eve of perhaps the most significant event in its short, tumultuous life as a publicly traded security. In return for agreeing to give Truth Social a first crack at certain topic-defined aspects of his rambling internet word-ejaculate, and not much else, Trump was given a 57% stake in Trump Media. Initially restricted, Trump can now start selling his personal shares.

Trump Media stock was down 6.6% on Tuesday, September 17, closing the trading day near an all-time low at $16.14 per share as Trump’s selling restriction was about to expire. That left Trump with stock worth about $1.8 billion. With Trump and other insiders now able to sell, as of the end of trading on September 23, the DJT stock price had fallen to $12.15, eroding the value of Trump’s shares by nearly a quarter in less than a week.

Two weeks ago, Trump said that he had “absolutely no intention of selling” his 114,750,000 shares — but that is what he would say, given that the price leaped by double digits as soon as he said it. The guy is not exactly known as a beacon of honesty.

Two things are about as near to certain as you can get in the world of finance. First, if Trump sells all or a substantial portions of his shares, that will almost instantly send the DJT stock price plummeting further, resulting in a huge windfall for Trump and leaving his most ardent supporters holding the bag. Second, if Trump loses the election in November, Trump Media shares will shortly thereafter become virtually worthless both for Trump and for anyone else who is unfortunate enough to still own them.

Trump already has a lot riding on the 2024 election, like the outcome of his dozens of felony convictions and the disposition of dozens more criminal charges against him. He’ll be OK one way or another if he wins. But banking at least a billion now would be one hell of a hedge against the possibility that he loses.

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Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at [email protected].

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