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Truth Social continues to plunge amidst new weirdness

I'm sitting in a waiting room with nothing better to do, so here's how Truth Social is doing:

Keep in mind that the actual value of TMTG is about $2 plus the value of the Truth Social platform. In other words, about $2. Maybe $3-4 if we're being generous. In other words, it still has a ways to go before it hits bottom.

But the stock isn't plummeting just because people are figuring out it's a scam. It's also because of an announcement that management plans to sell more shares:

The filing describes a plan to offer more than 21.4 million shares of common stock, issuable “upon the exercise of warrants,” the filing shows. Stock warrants give their holder the ability to buy shares at a predetermined price within a certain time frame.

Trump Media predicted in the filing that it will receive “up to an aggregate of approximately $247.1 million from the exercise of the Warrants.”

The idea here is that holders of the warrants will exercise them to buy newly issued stock at $11.50 per share, which will net the company $247 million but dilute the value of all the existing shares. The warrant holders can then turn around and sell their 21 million shares on the open market at a profit. The warrants are held by ARC Global Investments, which is controlled by Patrick Orlando, who set up this whole deal until he was fired last year. He's currently suing Trump Media.

But that's not all! There's also this:

The company also seeks to offer the resale of up to 146.1 million shares of stock from “selling securityholders,” 114.8 million of which are held by Trump himself. Trump owns 78.8 million shares of the company, and stands to obtain 36 million “earnout shares” if the stock stays above a certain price for enough trading days.

I don't even know what this means. Some of Trump's earnout shares accrue if the stock stays above $12.50 for 20 days over the next 18 months, which is pretty certain. Others have different requirements. But what does it mean to offer them all for resale? Beats me.

In any case, this has all spooked shareholders, who had plenty of reason to be spooked already. I expect further declines.

24 thoughts on “Truth Social continues to plunge amidst new weirdness

  1. clawback

    My interpretation was that they intend to do a second public offering, and instead of selling newly issued shares they would be offering shares already owned by insiders. In other words, it will allow Trump to cash out.

    Edit: well, except that the exercised warrants would result in new shares.

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  2. different_name

    That "resale" thing does seem a little sketch, I'm curious what that looks like. Normally the insiders would just take their stock to the public market via their brokers. This sounds like at least a way to obscure who is selling, and given how weird this already has been, I would be completely unsurprised if there were another scam woven in here.

    But in the end, there are only a few baskets of people holding this stock.

    - insiders trying to cash out while trying to screw the others and not getting shivved themselves,
    - suckers,
    - day traders.

    I don't feel sorry for any of them. The suckers have been watching this show for a decade; if they still want to play, that's because they still think they're in on the scam.

  3. KinersKorner

    Poor suckers better bail. On its way to zero. Keep in mind it costs a fortune to short it now. As soon new shares hit it will be far easier to short the living daylifgts out of the pig. 3 bucks might be its new 52 week high

  4. David Patin

    The last normal Republican President, with a resume that wasn't a joke, was H. W. Bush. And he was dumped by the Republican Party.

    This country is so screwed up. Actually scratch that, the Republican Party is so screwed up but taking the country down with it.

    1. KinersKorner

      It’s amazing how many jerk offs and fools they run and how can anyone vote for any of them? Brain dead stooges the entire lot of them. Man, never thought I’d never say it but I sure miss the Rocky Republicans. Last one was Pataki here in NY. They’ve run a bunch of raving morons since.

  5. KinersKorner

    Have to say I am enjoying its tanking and sort of wondering what the morons featured in the WaPo article a few days ago are saying now? Maybe something like “ man those Libs are really crafty and smart”? Doubt it but a nice though anyway.,,

  6. kenalovell

    Once it sinks in that Trump is selling his own shares, even the most obtuse cultist is likely to realise the company's a dog. They only bought them in the first place because of their blind faith in Trump to make social media great again.

    1. FrankM

      I wouldn't count on it. There's a sucker born every minute and Trump and people like him have been fleecing them since they all lived in caves.
      No one ever went broke overestimating their gullibility.

  7. NotCynicalEnough

    In theory Trump Social could take the money they earned from their suck ... investors and buy a real company with actual earnings. That would depend on Devin Nunes and people named Trump being able to identify an undervalued company and does anybody really believe they can do that?

    1. aldoushickman

      "Devin Nunes and people named Trump being able to identify an undervalued company"

      Trump appears to believe that Mar-a-lago is worth billions, despite the county tax assessor concluding that it's worth <$40 mil, so maybe TruthSocial can invest in that lucrative business.

  8. J. Frank Parnell

    Taking money from the truly committed MAGAt's and giving it to the grifters, including the grifter in chief. Still, a win for our side as it highlights TFG's grifting skills vs. his business acumen, and syphons money away from his PAC's.

    It shows just how dumb Donald is that he holds something like 60% of the stock but is due to receive even more shares. He is just diluting (deluding?) his own position.

  9. ruralhobo

    All it takes is Saudi Arabia or another country willing to bet on Trump's election and that stock goes right back up. Its only value is as a means to buy US policy.

    1. Lounsbury

      No, no it does not. That is Lefty silliness.

      The Ibn Saud and others have far better ways to buy influence that to buy shares in this on a regulated stock exchange with quaterly disclosures which bring attention.

      Non transparent real estate and liscensing payments for example. Foreign operators as like the Saudis, Emiratis are smarter than to do something open in disclosure and visible to SEC when off-shore and Real Estate, Liscensing provide off-the-radar means

      Only idiots and scammers go for this (and shorters).

  10. kennethalmquist

    If I read the prospectus correctly, it was issued to allow the large holders of stocks and warrants to sell if they wish to. There are no new warrants being issued, and no disclosed plans for any of the large holders to sell. However, the issuance of the prospectus certainly calls attention to the possibility that some of the large holders might sell.

    I hadn’t known that Truth Social stole the Mastedon software until I saw the story in the prospectus. The software is free software so all Trump had to do to use it legally was to acknowledge he was using it and post the source code for the tweaks his company made, but Trump wanted to pretend that Truth Social had developed its own platform.

  11. zic

    Anyone know how much of the initial purchases were done by the RNC and pro-Trump Pacs?

    (I looked, and it was legal for them to purchase stocks. with their funds.)

    If that's the case; has Trump just potentially bankrupted the Republican Party?

    All that money that was supposed to go to local campaigns?

  12. memyselfandi

    I wouldn't have thought truth social would fall fast enough for the shorts to make money with a 700% interest rate. But I was wrong.

  13. mudwall jackson

    seriously, what does truth social have to offer other than donald trump? which, given his track business track record, means failure. beyond that take a look at the social media niche it occupies. the established leader, X, hemorrhages money. to call djt media a penny stock gives it too much credit.

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