Truth Social is a social media platform majority owned by former President Donald Trump.
A team of early investors says it wants to “stop Big Tech’s assault on free speech.” Doing so may require a rapid increase in the size of its user base, which is currently unknown.
The public has limited access to Truth Social’s usage data, which drives ad sales, a key indicator of Truth Social’s success. When contacted for comment, the company declined to disclose its usage data to CNBC.
Truth Social’s parent company, Trump Media & Technology Group, is the product of a blank-check merger with a special purpose acquisition company, or SPAC, that closed in March 2024. It currently trades under the ticker symbol DJT.
The strategy of building a business and launching a strong public market could benefit Trump financially as he heads into the 2024 election. As of July 2024, Trump owned 114,750,000 shares of TMTG common stock, He owns about 65% of the company. He could sell some of his shares as early as September, which could net him billions before Election Day.
The former chairman is also entitled to a maximum of 4,061,251 stock options, each exchangeable for one DJT share.
As of July 2024, the stock was trading at about $33 per share, above the $10 price offered to the project’s early backers when it was known as Digital World Acquisition Corporation. Investors have kept the company afloat as it has posted heavy losses on weak revenue.
“The stock price is more driven by the phenomenon of meme stocks,” says Michael Klausner, a professor of law and economics at Stanford Law School. The term “meme stock” refers to companies that suddenly gain popularity, especially on social media, leading to high stock prices and high trading volumes.
Securities and Exchange Commission filings for Trump Media & Technology Group cite a series of risks, including failing to deliver on its promise to generate users and advertisers. In the meantime, the platform is trying to grow its user base in the United States.
Watch the video above to learn more about Truth Social and its parent company, Trump Media & Technology Group.
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