Trump's Truth Social has only 5 million members but could be valued at $5 billion

Trump Media's social media app could be valued at more than $5 billion. Investors in Digital World Acquisition Corp. have approved a merger deal with Trump's company. Despite the potential windfall, Truth Social faces mounting losses.

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Donald Trump's social media platform is losing money, but it could still be valued at more than $5 billion.

Former President Trump's Truth Social is one step closer to becoming part of a publicly traded company after a long-delayed merger was approved.

On Friday, a shell company created solely to buy Truth Social's parent company, Trump Media & Technology Group, approved the merger, the Associated Press reported.

The merger could be worth about $5.7 billion and a timely $3 billion boost for Trump as he faces mounting legal fees and sanctions.

Despite the high figure, the company, which Trump founded in 2021 after being suspended from Twitter, as it was then called continues “for the foreseeable future”.

Truth Social has a minimal footprint compared to other social media platforms. It had about five million active members as of February this year, including mobile users and website visitors, according to estimates from research firm Similarweb, per CBS News.

This compares to TikTok which has over 1 billion monthly active users. Facebook has 3.049 billion monthly active users, and X/Twitter is estimated to have over 350 million monthly active users worldwide.

“I believe in TRUTH and MAGA” Donald Trump created Truth Social after being banned from X, formerly Twitter. NurPhoto/Getty Images

A securities filing by DWAC in November showed that the Truth Social app lost $31.6 million between its launch in early 2022 and mid-2023, Reuters reported.

And Trump Media lost $49 million in the first nine months of 2023 on revenue of just $3.4 million, according to The AP.

Jay Ritter, an IPO specialist at the University of Florida, told the AP that the losses meant “the company was in no way worth anything like” the stock price suggests.

DWAC highlighted the risk posed by the company's losses in filings with US regulators, while highlighting the high failure rate of new social media platforms.

But that doesn't seem to have bothered DWAC supporters, many of whom are retail investors and some who appear to be Trump fans.

“I hold and I don't sell! I believe in TRUTH and MAGA,” a member of a Truth Social group said Friday, CBS News reported.

Sources 1/ https://Google.com/ 2/ https://www.businessinsider.com/trumps-social-media-company-valued-5-billion-merger-2024-3 The mention sources can contact us to remove/changing this article

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