Opinion: Stock prices related to Donald Trump’s ‘Truth Social’ are soaring, read this article.

His would-be Twitter rival, Truth Social, is a high-risk speculative venture with few hard numbers behind it. It’s a topic that has already resulted in subpoenas from regulators and grand juries, even though it has barely begun. Oh, and even if Trump wins the presidency, he won’t have to use social media sites much to connect with the public. You purchase stocks at your own risk.

That’s not what I’m saying. that is… uh… Truth Social’s new stock market guide. This was just submitted to the U.S. Securities and Exchange Commission.

In case you missed it, Donald Trump is about to return to Wall Street.

He is in preliminary talks to list Truth Social on the stock market by merging its parent company, Trump Media & Technology Group, with publicly traded shell company Digital World Acquisition Corp DWAC.
-4.00%.

see: DWAC gains more than 15% following its acquisition of Trump Media & Technology Group, but there’s a potential snag here.

Trump himself has a growing number of legal issues to deal with, not just his presidential campaign. Meanwhile, Digital World itself has been having trouble with the Security and Exchange Commission and recently agreed to pay $18 million to settle fraud charges related to this potential merger.

But don’t worry about all this. Stock prices are suddenly surging as Trump heads for the Republican presidential nomination and the possibility of returning to the White House increases. The stock has tripled to $48 since the Iowa caucuses in January, potentially valuing the business at $6.5 billion.

But the nearly 600-page trading manual is terrible. This shows all the reasons investors jumping on the MAGA hype train might want to think twice, or even three times, before taking the plunge.

“A number of companies linked to President Trump have filed for bankruptcy,” he warned investors. “There is no guarantee that TMTG will not go bankrupt either… Many companies that signed licensing deals with President Trump have failed. There is no guarantee that TMTG will not fail either.”

In case you forgot, it says, “The Trump Taj Mahal, built and owned by President Trump, filed for Chapter 11 bankruptcy in 1991.” “Trump Plaza, Trump Castle, and Plaza Hotel, which were owned by President Trump at the time, filed for Chapter 11 bankruptcy in 1992.”

Trump Hotel & Casino Resort, founded by President Trump in 1995, is said to have “filed for Chapter 11 bankruptcy in 2004.” “Trump Entertainment Resorts, Inc., the new name given to Trump Hotels & Casino Resorts after its bankruptcy in 2004, declared bankruptcy in 2009.”

Did you know that gamblers say the house always wins? Here is your rebuttal.

Trump Hotels & Casino Resorts also faced difficulties as the law was passed. “On January 16, 2002, the SEC issued a cease-and-desist order against Trump Hotels & Casino Resorts, Inc. (“THCR”) for violating the anti-fraud provisions of the Exchange Act,” the prospectus says.

I have previously written about Trump Hotels & Casino Resorts. Ordinary investors, drawn to the stock by the allure of the Trump name, ended up taking off their shirts, pants, and shoes and standing on the Atlantic City boardwalk in their underwear. Trump himself pocketed millions, but shareholders lost almost everything.

see: Donald Trump was a stock market disaster

See also: Donald Trump’s business disaster is worse than you think

“Trump Shuttle, Inc. was founded by President Trump in 1989, but defaulted on a loan in 1990 and ceased to exist by 1992,” the prospectus continues. “Trump University, founded by President Trump in 2005, ceased operations in 2011 due to lawsuits and investigations into the company’s business practices.”

Let me remind you that this is not the fake news the liberal media is talking about. A stock market guide to Trump’s own businesses.

“Trump Vodka, a brand of vodka produced by Drinks Americas under license from the Trump Organization, was launched in 2005 and discontinued in 2011.” “Trump Mortgage, LLC, a financial services company founded by President Trump in 2006, ceased operations in 2007. GoTrump.com, a travel site founded by President Trump in 2006, ceased operations in 2007. Trump Steaks, a steak and other brand founded by President Trump in 2007, stopped selling the meat two months after its launch.” These months.

But Truth Social will be different. Yes?

There’s also a lengthy section listing all of the former president’s current legal issues. You always know you’re buying quality stocks when the prospectus reads like a police blotter.

Then there is the “Truth Social” deal itself.

The Trump Technology and Media Group “aspires to build a media and technology powerhouse to compete with liberal media consortia and promote free speech.”

What is the total number of Truth Social signups to date? uh… 8.9 million people.

In the nine months to September 2023, the company had an operating loss of $10.6 million on revenue of just $3.4 million.

Meanwhile, it paid $37.7 million in interest expenses.

If you want more financial information about Truth Social before investing, you’re not alone. The board of Digital World, which will be a merger partner, also acknowledged it would like more financial information.

Unfortunately, Trump’s business “did not provide TMTG’s financial projections to the Digital World Board in connection with the Digital World Board’s curtailment due diligence process,” they said.

Oh well. You can’t have everything.

Part of that may be because the people who run Truth Social, led by CEO Devin Nunes, a former member of the U.S. House of Representatives, don’t really have too much data. “(I)NVESTORS SHOULD KNOW THAT TMTG HAS NOT RELIED ON SPECIFIC KEY PERFORMANCE INDICATORS TO MAKE BUSINESS OR OPERATIONAL DECISIONS SINCE INCORPORATION,” the prospectus reports. “As a result, we are unable to maintain internal controls and procedures to collect this information on a regular basis; If any.” My italics.

Trump’s operation chosen Don’t track these metrics. The report states: “At this point in its development, TMTG says compliance with traditional key performance indicators such as subscriptions, average revenue per user, ad impressions and pricing, and active user accounts, including monthly and daily active users, could potentially turn the company around. I believe it. “We are focusing on strategic evaluation of business progress and growth.”

They didn’t want the numbers to get in the way of their business. This is called the “alternative facts” school of business.

But the real peach here is that investors are buying these stocks in the hope that Donald Trump will do with Truth Social what he did with Twitter, but there’s no guarantee that he’ll actually use them much. Even if he gets elected president.

That’s because the agreement between Donald Trump and Truth Social is limited, according to the prospectus. Yes, he needs to post some of his social media messages first. However, only “non-political” accounts can be created from his “personal (i.e. non-business)” account. And each post’s Truth Social exclusivity only lasts for 6 hours.

Oh, and President Trump can also cancel this agreement with 30 days’ notice “at any time on or after February 2, 2025.” That is, immediately after the inauguration (if any).

And until then, who will decide which social media posts are ‘political’ and therefore excluded from exclusive deals? Guess.

“President Trump… You can also post social media communications from your profile as you see fit.”At his sole discretion, politically relevant Anytime on any social media site“, the prospectus warns. My italics.

“As a presidential candidate, most or all of President Trump’s social media posts may be considered politically relevant,” he added.

Accordingly, a warning is issued to investors.Meaningful solutions may be lacking. “What if President Trump minimizes his use of Truth Social?”

Trump will own at least 58% of the new company’s stock, giving him complete control and only hope for minority investors. What could go wrong?