Over at New York, Kevin Dugan asks the question on everyone's mind: Why has DJT stock tanked over the past week? Shouldn't it have gone up after Donald Trump won? Instead it's plummeted 25% since the election:
Dugan notes that there's been some insider selling, and also that DJT might be suffering due to the frothiness of the entire market. Maybe investors are too busy buying Bitcoin, tech stocks, and S&P 500 index funds to waste time on risky little stocks, even if they're backed by the president of the United States.
These are good points, but after thinking about this for a while I've come around to a different, more prosaic view. We've all been assuming that DJT is basically a play on Trump himself, and that's probably true as far as its meme value goes. But aside from its possible usefulness as a tool of bribery, DJT is still a company that's valued by investors in the usual way based on revenue and earnings. So how will those be affected by Trump's victory? The answer is that they won't be. DJT's value depends entirely on Truth Social's user base, which is so tiny it's almost invisible. Nor is there any real sign it's about to skyrocket. Why would it? You don't have to join Truth Social to read Trump's posts, and there's certainly no other reason to join whether Trump is president or not.
Bottom line: The election didn't really matter after all. Truth Social still has no plausible growth path, and that means revenue will remain minuscule and the company will keep hemorrhaging cash. Given that, even slight selling pressure will drive it down. And it has.
POSTSCRIPT: Needless to say, as with anything Trump related, WTFK? Who the fuck knows? This will be our mantra for the next four years. Anything could happen.
With respect to Truth Social, WTFC? (Who the Fuck Cares?)
TS's real value is as a vehicle for Musk to bribe trump--XTwitter pays outrageous $ for TS--Musk gets taxpayer assets (launch sites, NASA facilities, contracts). Coming soon to a former democracy near you.
Some of the shit we'll be seeing in Trump 2.0.
Elon & Vivek's new baby, the Dept of Government Efficiency, is hiring. Here's what they are looking for, per a tweet: "super high-IQ small-government revolutionaries willing to work 80+ hours per week on unglamorous cost-cutting." Applicants must send in resumes by DM via a paid account on Twitter. What's the pay at DOGE? Nothing. Yup, zippo. But Musk is telling applicants the work will "greatly help America." No doubt they'll be getting only the finest applicants.
Can you imagine Elon and Vivek being able to cooperate, long-term? I can't.
But since it's all theater anyway, it probably doesn't matter.
I am still thinking that Trump had his billionaire buddies outside of the U.S. to buy the stock leading up to the election to pump up the price. When it maxed out, those that did not have "diamond hands" took the opportunity to sell so they would not lose their entire retirement.
DJT is just another vehicle for front-running - roughly described as buying on the rumor and selling on the news.
So, where has Trump been announcing things like his cabinet picks? On X/Twitter? Yes, because Musk is his new best friend?
This is a death knell for Truth Social. The smart money is getting out. One of the possible futures of it was that Trump would get elected and make Truth Social the primary channel for his communications with the public, which would drive a whole bunch of traffic - and hence revenue - its way.
Musk probably saw this and, uh, jumped to intervene, which appears to have been successful.
Whether or not he sells his shares, Truth social will be how Trump gets even more money. By selling overly inflated ads to people wanting to bribe a sitting president. It'll be hard to justify the prices but does anyone think Trump cares or that a GOP controlled government will do anything about it?
I predict Twitter will make a friendly takeover bid for Truth Social, netting Trump a few billion bucks for doing absolutely nothing, and guaranteeing Musk a free hand in all areas of government policy that affect his businesses.
He's already backed abolishing the $7500 EV rebate, in the belief it will hurt his competitors much more than it will hurt Tesla.
Concur, but I think it'll happen after one of his companies gets a gobsmackingly stupendous federal contract for many multiples of what he ends up paying trump. But both of those things better happen before they get tired of each other and rub egos too abrasively.