Regardless of where someone falls on the political spectrum if they read political news and blogs they know generally what’s going on with Truth Social these days. During the last week of March and to great fanfare Trump’s Truth Social platform began selling shares of its new stock on the NASDAQ exchange. It opened at a price of over $70 and quickly jumped. To over $79 a share at one point. It has gone downhill, and steadily ever since and at the closing bell this past Friday was less than half it’s initial price. It’s almost certain to continue its steady decline, just as experts predicted.
The questions have been there all along, starting with how the hell did a platform that’s been up and running for a couple of years but only has had a few million subscribers (only a fraction of Facebook/Meta and Twitter/X which Truth Social was Trump promised going to compete) start out at such a price? It was known for those who cared to look (as professionals did) that in the prior year TS had only taken in $4 million while losing $59 million – while paying out big salaries and bonuses. Clearly, for anyone that looked beyond Trump’s hype the whole thing was a seat-of-the-pants venture. Technical problems, lack of interest, little advertising and what was there was from the Lindell types.
Sure, some of Trump’s mega rich cronies helped prop the whole thing up most likely to either curry favor in case he got re-elected (somehow) or figured that if the time came where the platform finally went public they could quickly cash out and make a nice pile of money before the whole thing came crashing down. Or both (?) Still, while I don’t know a lot about investing or the stock market I felt there had to be something else in play and after reading an article posted by The Washington Post this morning my suspicion was confirmed. MAGAs have bet and bet big on Truth Social and are seeing their money, in some cases their entire next egg go up in smoke.
It’s one thing for a MAGA to blow money on Trump T-shirts, “covfefe” cups, ball caps, mugshots, Trumpy Bears and so on. Sometimes hundreds of dollars worth. Sometimes even more than that. Frankly I’m shocked that Trump hasn’t come out with his own brand of assault rifle, or even an entire line of guns. He’d make a fortune. Sure, when the lawsuits started (due to crappy manufacturing) there’s be that, but we all know he’d be long dead and gone by the time those kinds of lawsuits wound their way through the courts. But I digress. What we learn from the linked WaPo article is that there are plenty of MAGAs doing the Retail Investor thing, plunking down many thousands and in some cases tens of thousands in Truth Social stock. If you want to know more about retail investors and their effect on the markets check out the link I just provided. The short version is regular folks willing to spend say a thousand bucks or more buying stocks directly, or if they have a brokerage account telling the broker to. Even when the broker recommends against it.
What the WaPo article tells us is that the phenomena of MAGA Retail Investors betting on Truth Social began a couple of years ago. It would seem a lot of the “value” came from MAGAs coughing up thousands. For the typical MAGA (hell, for me too!) even a thousan dollars (and with tons of MAGAs much more has been spent, or rather wasted) that’s a LOT of money. But they believed in Trump and that with some patience they’d not only be rewarded but wind up rich. The PT Barnum in Trump had to love it. Still, what’s really wild as you read the article is that although the price of TS is dropping like a boulder rolling downhill not only are these goobers, suckers still (in most cases) hopeful but they are continuing to buy shares!
I’d encourage you to read the entire WaPo article. Trust me, it’s worth the time. However I’ll pull out some parts of it to give you a sense of what it details. For example they cite a guy from Oklahoma:
Jerry Dean McLain first bet on former president Donald Trump’s Truth Social two years ago, buying into the Trump company’s planned merger partner, Digital World Acquisition, at $90 a share. Over time, as the price changed, he kept buying, amassing hundreds of shares for $25,000 — pretty much his “whole nest egg,” he said.
That nest egg has lost about half its value in the past two weeks as Trump Media & Technology Group’s share price dropped from $66 after its public debut last month to $32 on Friday. But McLain, 71, who owns a tree-removal service outside Oklahoma City, said he’s not worried. If anything, he wants to buy more.
“I know good and well it’s in Trump’s hands, and he’s got plans,” he said. “I have no doubt it’s going to explode sometime.”
With thirty million or so MAGAs out there it’s not a stretch to imagine say twenty thousand of them “investing” (betting, like at the craps table in a casino is more like it) say five thousand bucks and we’re talking $100 million right off the bat. In actuality those numbers are likely higher. If you read the Investopedia link you’ll see Retail Investors have a huge impact on the markets. Much more so than professional/institutional investors would like in fact. They can distort things even with large, hell even blue chip stocks. For good or ill. So for a small entity like Truth Social they can literally make it. Or prop it up longer than it would otherwise last. Put more plainly if you’re wondering why Truth Social’s share price hasn’t already dropped to a couple of bucks a share (if that) now you know why.
It was only on the second read though I picked up on a tidbit in the WaPo article that’s I think significant. Devin Nunes just had a chat with Fox Trump fluffing financial “reporter” Maria Bartiromo. Digital World Acquisitions had already boated of having over 400k retail investors having bought shares. Nunes told her that the company had added over 200k new ones in the past couple of weeks. You know, for once I think Nunes might actually have told the truth. (Yes, that strange sound you’re hearing is hell freezing over)
Anyway we have the McClain’s out there (probably far more than you would have imagined until now) hoping they didn’t blow their (and their family’s) nest egg on yet another Trump vanity project. They are hoping for a miracle. Then there are some although I suspect not a huge number who invest for a different reason:
Carol Swain, a prominent conservative commentator in Nashville who previously taught political science at Vanderbilt University, said she invested $1,000 in Trump Media stock earlier this month, at $48 a share, over the objections of her financial adviser, who predicted the stock would dive.
“If I lose it, fine. If I make a profit, wonderful. But at the end of the day, I wanted to show my support,” she said. “There’s such an effort to destroy him and strip his wealth away, and so much glee about it. I would like to see him be a winner.”
That’s worth a closer look. Her broker recommended against the purchase but she ordered it anyway. BUT only $1k. An amount she can afford to lose and not miss much, if at all. But note that she doesn’t spend her time on Truth Social itself but rather over on Twitter/X where she encourages others to buy shares! Not to mention as a conservative commenter in Nashville and Tennessee being chock full of MAGAs she’s no doubt gotten plenty of the kinds of suckers Trump has preyed on his entire life to waste their money propping up Trump. People for who (as I mentioned earlier) even $1k is a helluva lot of money I wouldn’t be surprised if she’d gotten a thousand or more people to kick in ten or twenty grand. The cynical part of me suggests that’s one of Devin Nunes’ key duties – keeping track of the Carol Swains to be able to reward them with jobs in a second Trump administration.
Of course, all is not well since the stock price is falling and steadily. Some like McClain are worried (I suspect distraught is more accurate) but hopeful. Others are complaining, wondering where the hell the bottom is. Bad news for those folks – TS will keep falling until it’s a penny stock. Cut your losses and get out. Tomorrow! This is MAGA Land however so naturally the free fall of Truth Social is anything but the free market at work. Nope, the belief that darker forces are at work has already spread throughout the MAGA Retail Investor class. For example there are people like Todd Schlanger. He’s an interior designer at some furniture store in West Palm Beach. He claims Trump’s been a customer even. Schlanger says he’s invested about $20,000 and is continuing to buy new shares every week:
Schlanger said he now watches his stock performance every day hoping for positive signs. In a Truth Social post last week, he encouraged “everyone who supports Donald Trump and Truth [Social to] buy a share everyday” and asked, “Do you think we have hit bottom?” (The stock slid nearly 10 percent after that post.)
He suspects the recent drops in share price have been the result of “stock manipulation” from an “organized effort” to make the company look bad. There’s no proof of such a campaign, but Schlanger is convinced. “It’s got to be political,” he said, from all the “liberals that are trying to knock it down.”
Ah, now we can see where all this is headed. Those of us with a lick of common sense knew from the beginning Trump’s grandiose promises of Truth Social being just the start of a “bigly” “YUGE” and multi-faceted media empire was bullshit. Pure, vintage Trumpian nonsense. Delusions of grandeur packaged into a money-making scam. However, while Trump doesn’t know much he knows his MAGAs. If Trump feeds them a sh*t sandwich and tells them it’s the sweetest/best tasting thing they’ve ever eaten they’ll do their best to convince themselves it really is the best thing they’ve ever eaten. Maybe (they’ll think) there’s something gone wrong with their taste buds.
The WaPo article lists examples of others talking like Schlanger. Truth Social’s dropping price is a deep state plot, liberal’s fault (so we are being faulted for not being like them as in stupid?), greedy “Wall Street types shorting the stock” or some combination of that and other even crazier reasons. The point is they refuse to believe anyone but Trump. It CAN’T be Trump’s fault, that he created a nothingburger stock scam to bilk them out of their money. And make no mistake, it won’t be billions but Trump WILL walk away from all this with some substantial ill-gotten gains.
Sure, as the WaPo notes there are some who are starting to think they’ve been had. Or at least are seriously worried that’s turning out to be the case. However the fact remains that an awful lot of Retail Investor MAGAs turned out to be what gave Truth Social it’s fleeting (a couple of days) of glory in trading and have caused it “only” to steadily decline instead of by now completely collapsing. However, it will wind up being worth nothing. Trump will “have gotten his” by creating yet another scam where his faithful MAGAs lost theirs. To him.
The funniest/saddest part of this is that we (liberals or non-maga) don’t have to do a thing.
This thing is just dying a natural death.
They want to be just as rich as their hero, Trump.
They will get their wish, at least as far as being just as rich as he really is.
OK, first if nunes was telling the truth about 400k retail investors at, say 100 shares each, that’s 40 million shares. some have bought a lot more. Trump holds I believe 67 million. with a total market cap of 122 million that’s getting real close to all non Trump shares. does that mean that no one else had any significant grant of shares?
second, you kind of skirted around it but didn’t quite get there. I think the original valuation of 50 per share was basically the same as pricing a product. you use one or another method to determine what would be a good price (for you) that customers would be willing to pay.
third, where did all the money from the ipo shares go? 40 million shares at 50 per share is 2 billion dollars. a lot of those shares were sold for more when the price jumped to as high as 78. it’s been bugging me that Trump hasn’t been freaking out over the cratering price. maybe he doesn’t need to worry about it. I also wonder if he has a stake in dwacs. market makers typically get a chunk of the ipo shares.
finally, buying shares now isn’t going to prop up Trump or truth social. most if not all the ipoh shares are gone. all the activity you see now is buying and selling amongst private parties. the company doesn’t get anything from that.
the Trump not freaking out part is really bugging me. maybe he just has more to worry about than a few billion dollars going down the toilet. maybe.
I think the part about Carol Swain needs to be spread far and wide just for the fact that she used to teach Political Science at Vanderbilt and she still bought shares in Trump’s media stock. And despite being warned by her financial adviser, and the fact the stock is in a form of free-fall, she says she’d STILL do it.
For all the BS about “liberal indoctrination” on colleges, it seems that “conservative indoctrination” may be as pervasive (right-wing media just ignores it for reasons). But, the main point is if I had been one of her students and got a failing grade, I’d be demanding to have my entire coursework reevaluated by an independent teacher, especially if it screwed up my overall GPA and affected my graduation. (Vanderbilt may be in the middle of Tennessee but its students still lean more on the liberal end and its faculty is pretty moderate.)
Trump Guns – GURANTEED never to backfire! (until they do).
YOu may not know tons about the market, but Jim Chanos does. I am SURE he’s made a crap -ton from by shorting this stock the first minute he could. And if MAGA’s don’t like that – tough.