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Now What Happens with TMTG?

As of Tuesday, TMTG (Trump Media and Technology Group), which is a pretty fancy name for a dying social media app, is a publicly traded company, with all that implies. Once the hype wears off, investors are going to start looking at it the way they look at comparable companies. They are probably not going to like what they see:

Company IPO date Monthly users Market cap.
Meta May 18, 2012 845 million $104 billion
Twitter Nov. 7, 2013 215 million $24 billion
Pinterest April 18, 2019 250 million $10 billion
Truth Social March 26, 2024 5 million $6 billion

eX-Twitter is private now, so the value is an estimate. Truth Social brought in about $5 million last year (and spent way more than that, for a net loss on the order of $60 million). In contrast, Facebook made $3.7 billion in profit in the year before it went public. Furthermore, the audience for Truth Social is a niche and is shrinking. No major national advertisers will touch it with a barge pole. Until now, it has avoided scrutiny of its business model. As a publicly traded company, it is going to have to be much more forthcoming now or face shareholder lawsuits.

TMTG is a meme stock now buoyed by Trump fans, but that won't last long as the markets begin examining it the way they examine other companies. And when Trump starts selling stock in volume, that will drive the price down sharply. He could do it very slowly—say, selling 0.25% per week—but then it would take him years to get rid of all of it, by which time the price might have collapsed completely.

The merger also brings up some other thorny issues. Suppose the stock is being kept afloat by Vladimir Putin, MBS, and various other foreign dictators who want to curry favor with Trump. Now suppose Trump wins the election. Does that bring us back to that nasty Emoluments Clause in the Constitution again? If foreign actors are supporting a company of which Trump is majority owner, is that a violation of the Constitution? Could he be impeached for it if Democrats control the House? It harks back to the situation of foreign governments holding big events at the Trump International Hotel in D.C. while Trump was president. When James Madison wrote the Constitution, he was probably not thinking about the possibility of a president being majority stockholder of a publicly traded corporation worth $6 billion and all the ethical issues that could lead to. We could find out some of the consequences if Trump wins. (V)

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