Analysis: The Dubious Valuation of Trump Media

Jill Filipovic, a journalist from New York and author of the book “OK Boomer, Let’s Talk: How My Generation Got Left Behind,” shares her opinions on CNN. You can follow her on Twitter for more updates.

It was once the best of times at Trump Media, but now it seems to be heading towards the worst of times. Similar to many aspects of former President Donald Trump’s businesses and personality, Trump Media has a flashy exterior, supported by a group of loyal fans and followers, but lacks substantial content.

Jill Filipovic.

Jill Filipovic.

Last week, Trump Media was valued at almost $11 billion, which is a huge amount for a company that is losing money and only bringing in a few million in revenue. Experts who analyzed the numbers are puzzled because they just don't add up.

The company's financial situation is becoming clearer, revealing that it is like a house of cards. In the first nine months of last year, the company reported a loss of $49 million, while only bringing in $3.4 million in revenue - similar to what a Krispy Kreme franchise makes in a year. Despite being Trump Media's response to Twitter, Truth Social has less than 500,000 monthly active users in the US, in comparison to Twitter's 75 million. Even newer social media platforms have significantly larger user bases, with Threads claiming to have over 130 million users.

The market appears to be adjusting to the reality of the situation. As of Monday afternoon, Trump Media's valuation dropped to $8.8 billion. However, experts believe that the company is still greatly overvalued. This is largely due to conservative supporters of Trump investing in the company based on their personal admiration for him, rather than the company being a sound investment. According to NYU Law professor Michael Ohlrogge, the current stock price of the company does not align with any rational valuation.

The company could still be considered significantly overvalued, especially if Trump's loyal supporters continue to hold on. Additionally, the upcoming election may also play a role, as Trump PACs are likely to allocate some of their advertising budget towards Truth Social.

The story of Trump Media is quite intriguing as it serves as a prime example of the Trump playbook. Trump presented himself to the American public as a wealthy and accomplished businessman, someone who had built his own success and could tackle America's challenges in the same manner he dismissed contestants on "The Apprentice."

donald j trump

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Trump's rags-to-riches story was largely fabricated. In reality, he was born into wealth and his business success was due to his father's financial support. He often exaggerated his wealth, not only to boost his own ego but also, as a recent court case revealed, to deceive investors.

Lying is a common tactic for Trump. During his time as president, the Washington Post reported that he told a whopping 30,573 lies in public.

Despite a long history of dishonesty and a failed reelection campaign in 2020 (which he still denies the outcome of), Donald Trump has once again been chosen as the Republican Party's candidate for the presidency.

Many have pointed out that Trump's MAGA movement and the unwavering loyalty of his supporters seem to resemble a cult. Trump, as the leader, influences his followers' perception of reality. For instance, a large portion of Republicans, around 70% as of last summer, still believe Trump's false claim that the 2020 election was rigged.

Even if Trump is held accountable for sexual abuse and fraud, there are still strong GOP candidates who could challenge him. However, this doesn’t lead to a significant number of Republicans turning away from him. One characteristic of a cult is that its followers remain loyal to the leader, even when he is clearly mistaken. For example, if he wrongly predicts the end of the world, his devoted followers will always find a way to justify his actions and remain united.

In a cult, the leader is always considered right, even if he changes his stance. According to experts like Rick Ross and psychiatrist Robert Jay Lifton, destructive cults often revolve around a living leader who holds ultimate power and authority, without facing any real accountability within the group.

Republican presidential candidate former President Donald Trump speaks at a campaign rally, March 9, 2024, in Rome Ga.

Republican presidential candidate former President Donald Trump speaks at a campaign rally, March 9, 2024, in Rome Ga.

Mike Stewart/AP

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Trump's image is at stake in 2020 as the Republican Party chose not to release a new platform. Instead, they committed to supporting Trump and his America-first agenda.

Whatever Trump says becomes the party's policy, which is not how a typical political party operates. This behavior is more characteristic of a cult.

Cults often manipulate their followers into giving money to the leader or institution, even if there is no clear benefit to the followers. The main purpose is to demonstrate loyalty to the leader.

Trump has utilized various methods to support his agenda, including making questionable recurring donations, gaining control of the RNC and its funds, and establishing Trump Media. Some conservative supporters are even purchasing stocks as a display of loyalty to Trump rather than for financial gain.

Political campaigns often rely on donations from supporters. However, it is unusual for a candidate to seize control of the party structure, appoint unqualified individuals (such as his daughter-in-law), and direct funds towards covering his legal expenses. While people typically invest in specific stocks to make a profit, the motivation behind purchasing stocks related to Trump seems to be driven by allegiance rather than financial gain.

Many people who invest in Trump Media appear to be more focused on pleasing the former president rather than making a profit, or are simply continuing to believe his claims despite his history of dishonesty. Despite facing legal repercussions, many MAGA supporters remain confident in their support for him. Sign up for our free weekly newsletter to stay updated.

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"The first rule of cults, according to cult expert Daniella Mestyanek Young, is that you never think you're in one. The second rule is that the cult will forgive any wrongdoing, except for the sin of leaving. The third rule states that even if someone committed a questionable act, it doesn't necessarily mean they are guilty.

The fourth rule could be summarized as: 'Give me your money.' This is a tactic that Trump has mastered. Currently, it seems to be working to some extent. However, like all his deceptions, confidence can only take you so far. While his most loyal supporters may never realize he's a scam artist, eventually the truth will come out. The real question is who will suffer the consequences: Trump or those who eagerly handed over their money."

Editor's P/S:

The article presents a compelling analysis of the current state of Trump Media, highlighting its financial struggles and the questionable motivations behind its valuation. The author draws parallels between Trump Media's situation and the characteristics of a cult, emphasizing the unwavering loyalty of its supporters despite evidence of financial mismanagement and dishonesty. The article raises concerns about the potential consequences of this cult-like behavior, both for Trump himself and for those who have invested in his ventures.

It is important to consider the broader implications of the issues discussed in the article. The rise of cult-like movements in politics is a matter of growing concern, as it can undermine democratic values and lead to dangerous outcomes. It is essential for individuals to be aware of the warning signs of cults and to critically evaluate the motivations and actions of political figures and organizations. Additionally, the article highlights the importance of financial literacy and the need for investors to make informed decisions based on sound financial principles rather than personal biases or blind loyalty.