Former President Donald Trump’s social media company Truth Social has overtaken Elon Musk’s X (formerly Twitter) in market value.
What are social platforms capable of?
Trump Media and Technology Group ( TMTG ), the parent company of Truth Social, is now valued at just over $10 billion, after its shares more than quadrupled since late September. The valuation leap puts it above X Holdings, which Fidelity recently valued at $9.4 billion.
The rise in TMTG’s stock price has less to do with business performance and more to do with Trump’s political prospects. As the GOP presidential nominee is in a close race against Democratic presidential nominee Vice President Kamala Harris, investors have taken keen interest in the company.
On Tuesday, TMTG shares closed up 9 percent at $51.51, after rising 21.6 percent the day before. Trading was so intense that it hit multiple halts, a stark contrast to the stock’s $12 low last month.
Social Challenges of Truth
However, this comes at a time when TMTG has faced significant financial constraints. The Florida-based company, which was founded by Trump in January 2021 after being removed from major social media platforms following the uproar at the US Capitol, has been losing money and struggling to grow revenue. TMTG reported a loss of more than $16 million in the quarter ended in June while generating revenue of just $837,000, according to regulatory filings.
Earlier this month, the Associated Press (AP) reported that a recent regulatory filing showed that the chief operating officer of Truth Social’s parent company had resigned and that the company had about 800,000 shares after a court ruling. An investor needs to relocate.
COO Andrew Northwall resigned from Trump Media and Technology Group Corp. last month, according to a Securities and Exchange Commission filing. The filing said the company plans to “transfer his duties internally,” but did not provide further details about his departure.
Despite these challenges, investor enthusiasm has pushed the company’s value ahead of other major players, including Caesars Entertainment and Hasbro.
Musk’s X
Musk’s initial acquisition of Twitter in October 2022 was valued at approximately $44 billion. At the time, Fidelity Investments valued its stake at $19.7 million. However, Fidelity’s blue-chip growth fund said its stake in X Holdings is worth about $4.2 million.
Meanwhile, Musk threw his support behind Trump’s presidential bid, pledging more than $70 million and participating in campaign town halls.
This article includes reporting from The Associated Press.