# The Curious Case of Truth Social's Valuation: A Deep Dive
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Chapter 1: The Rise and Fall of Truth Social
The evaluation of Truth Social is reminiscent of a financial illusion. Just like unsustainable businesses of the past, this platform is poised for decline.
Back in the early 2000s, during a real estate boom, I found myself with a chance to purchase a two-bedroom apartment. After taking an early retirement, I had a modest $10,000 in savings. Surprisingly, that was enough to qualify for a $300,000 mortgage. A realtor encouraged me to place a high bid on a dilapidated unit, but I had a gut feeling that it was overpriced.
Fast forward a few years, and the housing market collapsed, leaving many with inflated properties and the government needing to step in to assist. This situation brings me to the current status of former President Donald Trump's social media venture, Truth Social.
What Goes Up Must Come Down
Truth Social recently made its stock market debut, and its valuation has skyrocketed. Forbes reports that this places Trump’s worth at approximately $3 billion, marking a potential first for him as a billionaire—at least on paper.
However, this valuation feels deceptive. Trump has a history of dubious business dealings, and Truth Social seems like a poorly maintained asset.
The platform is led by Devin Nunes, a farmer with little expertise in social media. Despite its initial launch, Truth Social is struggling with declining user numbers and significant financial losses. From my understanding of the tech sector, there’s no justification for its current valuation.
In stark contrast to major social media platforms like X (formerly Twitter) and Facebook, Truth Social's user base is minuscule. According to The Guardian, Truth Social has around 500 million daily users, while X boasts over 200 million and Facebook has a staggering 2.9 billion. To add to the concern, Truth Social has yet to turn a profit.
Shady Business Practices
Truth Social stands out as an anomaly in the tech world. With Nunes at the helm, its financial health is questionable. The platform has been hemorrhaging money since its inception, and its advertisers primarily consist of niche companies selling MAGA merchandise and precious metals. This raises the question: How can it possibly be valued in the billions?
Many observers share similar concerns. Tech journalist Kara Swisher referred to Truth Social as a “non-company” during an interview, stating, “My podcast generates more revenue than it does,” on CNN.
Other industry analysts have echoed these sentiments. Adam Lashinsky, a former Forbes editor now writing for The Washington Post, described Truth Social as a “pig in the poke.”
Revenue Woes
Lashinsky argues that a business recording $3.4 million in revenue against $49 million in losses over nine months cannot realistically be valued at $5 billion. Investing in such a company could leave one feeling duped.
The path to profitability for Truth Social remains ambiguous. Some analysts speculate that it might be a classic pump-and-dump scheme, where unscrupulous investors hype the company to attract buyers before it crashes. This is a strategy often associated with Trump.
On “The Dean Obeidallah Show,” journalist David Cay Johnston suggested that Trump might seek a loan from a billionaire acquaintance in exchange for stock. However, it remains uncertain if any billionaire would engage in such a dubious arrangement. If Trump were to regain the presidency, however, having such an individual in his corner could prove advantageous—especially since he is currently barred from selling shares for six months.
In any case, it seems likely that Truth Social will not endure for much longer. It appears destined to join the ranks of Trump’s other failed ventures, such as Trump Airlines, Trump Hotels, Trump Casinos, and Trump University—all of which ultimately collapsed, leaving investors empty-handed while Trump walked away with profits. The cycle continues.
This video explores the valuation of Donald Trump's Truth Social and asks the pressing question: What is it really worth?
This video examines the reasons behind the nearly $10 billion valuation of Donald Trump's Truth Social, dissecting the financial and business implications.