Donald Trump said recently he had “absolutely no intention of selling” his stake in Truth Social. Does he mean it?
It would be naive to assume as much. Investors certainly have their doubts. Shares spiked some 25 per cent following Trump’s statement, only to hit new lows within days.
Of course, Trump may have meant what he said. Media reports habitually indicate shares in Truth Social rise and fall in tandem with Trump’s election prospects, the implication being shares will tank if he loses in November and soar if he wins.
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If Trump is confident of winning, he may believe shares will skyrocket. He may also be wary of selling before the election, given the potential for negative headlines and the obvious charge of profiting at the expense of small investors. However, the apparent link between Truth Social’s share price and Trump’s political fortunes is more myth than reality.
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The downtrend has been consistent, with shares down 80 per cent since April’s peak. True, shares spiked after July’s failed assassination attempt, but that rally barely lasted a day: new lows soon followed.
Truth Social brought in just $836,900 (€759,000) in revenue in the second quarter. Despite the share price pummelling, it is still valued at a nonsensical $3.1 billion. Shares may spike if Trump wins in November, but gains will likely be short-lived. In the end, Truth Social’s fate rests not on November’s election, but on the cold, hard truth of its fundamentals.
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