6 ms·

Truth Social losses $300M on Q1

73 points by miohtama 2y ago

kazinator 2y ago
Only an idiot would actually lose hundreds of millions on something that should just be a PC server running in a closet somewhere, on a residential broadband connection. It's probably a lie, for tax purposes. The fake loss can offset some real gain elsewhere.
- rco8786 2y ago
  > The fake loss can offset some real gain elsewhere. Bingo
- fred_is_fred 2y ago
  A rich investor dropping $10M on stock to get the inside track on the next president of the United States is a steal. Making money be damned.
miohtama 2y ago
> In Q1, the company recorded $311 million in non-cash expenses arising from the conversion of promissory notes, and the associated elimination of prior liabilities, immediately before the closing of TMTG’s merger with DWAC SPAC promoters are harsh mistresses. Hopefully Trump can get to the dumping of his shares soon, DJT share price has recovered from its lows.
killingtime74 2y ago
At many companies, tech or law firms, $770,500 is the revenue attributable to 1 employee or less
- chrisco255 2y ago
  I dunno there's countless tech startups that operate on low to no revenue especially in the first few years of operation.
  - hn_throwaway_99 2y ago
    With a 6 billion market cap??? Grifters gonna grift...
    - chrisco255 2y ago
      Is this your first cycle in tech?
      - hn_throwaway_99 2y ago
        Please show me any other companies with a > $6 billion market cap with < $1 million in revenue, especially companies that don't have heavy up-front R&D/capital costs.
        webninja 2y ago
        ImmunityBio, Inc. (IBRX) -Market Cap: 4.80B -Revenue (ttm): 302,000 -P/S Ratio: 15,892 -Forward P/S 161 https://stockanalysis.com/stocks/ibrx/ https://stockanalysis.com/stocks/ibrx/ Stunningly high price to sales ratio.
        webninja 2y ago
        Annaly Capital Management, Inc. (NLY) -Market Cap: 9.95B -Revenue (ttm): -146.20M -P/S Ratio: n/a (negative) -Forward P/S: 2.32 -Company Type: Mortgage REIT https://stockanalysis.com/stocks/nly/ https://stockanalysis.com/stocks/nly/ How can revenue (not to be confused with net income or profit) be negative?
        webninja 2y ago
        Trump Media & Technology Group Corp. (DJT) -Market Cap: 7.89B -Revenue (ttm): 2.59M -PS Ratio: 3,042.45 -Forward PS: Unknown -PB Ratio: 37.52 https://stockanalysis.com/stocks/djt/ https://stockanalysis.com/stocks/djt/ For comparison.
        chrisco255 2y ago
        All that matters for social media companies is user growth and retention. It's always possible to monetize attention. That's why Reddit, a nearly two decade old company that posted a $500M loss last quarter, is worth $10B. Facebook didn't monetize until 5 years in, YouTube didn't really ramp up ads until at least 5 years in either. And it bled money for at least a decade. Snapchat also 4 years or so before monetization became a focus. WhatsApp barely had any revenue when it was purchased for $19B. I'm not saying Truth Social is in the same caliber at all as the above companies, but inflated tech valuations happen every single cycle (see WeWork). There's over 1200 private startups right now with a valuation over $1B, many of which have low revenue: https://www.cbinsights.com/research-unicorn-companies https://www.cbinsights.com/research-unicorn-companies
etchalon 2y ago
The damning thing isn't the loss, it's the revenue. $770,500 in revenue. $300M in losses. And there are people buying this stock.
- Cheer2171 2y ago
  The stock is a legal way to buy favors from Trump.
  - ungreased0675 2y ago
    Can you explain that further?
    - mechagodzilla 2y ago
      Donald Trump owns ~80 million shares of Truth Social (58%). The company, as a profit-making enterprise, is basically an abject failure, but as a way to funnel money to Donald Trump, it is a roaring success. It would be frowned upon if a foreign government were to write a check to Donald Trump for, say, $100 million, but a sovereign wealth fund is perfectly capable of 'investing' a similar amount in his useless shell corporation. His stock in Truth Social, which has no possible future in which it's a profitable enterprise, is worth a few billion dollars because people with money are willing to use it as a vehicle to bypass restrictions on campaign donations.
      - fred_is_fred 2y ago
        Just like selling Bibles to churches who can’t make campaign donations. Everything with him is a grift. People need to remember that.
  - JumpCrisscross 2y ago
    > stock is a legal way to buy favors from Trump It’s closer to an NFT. He doesn’t directly benefit from holders; there are more direct ways to enrich him, e.g. loans.
JumpCrisscross 2y ago
Most of that is loss non-cash option-valuation dark magic. They’re losing about $9.3mm a quarter on their operations [1]. Given their $230mm cash pile, that’s over six years of runway. The punch line is less than $1mm of quarterly revenue. [1] https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849635/000114036124026889/ef20028790_10q.htm https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849635/0...
- ttul 2y ago
  …Making their multiple about 1,650x ARR… Something tells me that price ain’t sustainable.
  - nickthegreek 2y ago
    Only needs to be sustained til the big guy gets a large slice of the pie out.
- Animats 2y ago
  > In Q1, the company recorded $311 million in non-cash expenses arising from the conversion of promissory notes, and the associated elimination of prior liabilities, immediately before the closing of TMTG’s merger with DWAC. Anyone looking at the SEC filings to see whose promissory notes?
- goodluckchuck 2y ago
  Media is almost always a money loser, and more-often-than not a ’company paper’ a la Amazon & WaPo. Sometimes the funding is less obvious, e.g. mainstream TV, but major advertisers accept a negative return on the ads themselves in order to support the market-forming functions of the channel (impact on regulation, etc).
mikestew 2y ago
$750K in revenue? <$300 million on-hand? I'm surprised it's lasted this long. But most shocking of all: $6.6 billion-with-a-"b" market cap? Who the hell bids this shit up? Who but DJT himself would touch this stock? But while Truth Social is on it's way to being delisted, today I learned a valuable lesson: don't make the stock symbol your initials. Someone is not going to be pleased when "DJT" is a penny stock trading OTC.
- rc_kas 2y ago
  [flagged]
- moomin 2y ago
  It would not be the first company with stock ticker DJT launched by Donald Trump Jr to go bust. https://amp.cnn.com/cnn/2024/03/25/investing/trump-stock https://amp.cnn.com/cnn/2024/03/25/investing/trump-stock
- ceejayoz 2y ago
  > Who the hell bids this shit up? Who but DJT himself would touch this stock? Oligarchs who can’t otherwise send Trump billions in campaign contributions. Bid it up, let him sell, and suddenly he owes the bonesaw and polonium people a big favor.
  - toolz 2y ago
    Trump won against hillary spending roughly half as much as she spent and spent proportionally even less to win the primaries. He's not a candidate that wins based on money, which is in contrast to almost every other election in modern US history. Maybe he is getting money in shady ways, but his funds compared to his results wouldn't suggest that is the case.
    - ceejayoz 2y ago
      He’s a candidate that owes half a billion in legal losses that put his prized real estate empire at risk.
endisneigh 2y ago
I’m very curious to the price action of this stock if trump were to win reelection.
- dotnet00 2y ago
  While he could probably require it to be used in addition to other platforms, I don’t think he'd be legally able to force it to be the only platform used.
throwaway4736 2y ago
[flagged]
Kye 2y ago
Meanwhile all the other Mastodon instances run on Patreon donations.
- ramses0 2y ago
  Wait wait... I've ignored everything political as much as I can, but don't tell me we're getting sold out on some $3B valuation of an unpopular Mastodon Instance? It never crossed my mind to consider the "tech stack" of this farce.
  - internetter 2y ago
    Its ripped from Mastodon: https://boehs.org/node/truth-social https://boehs.org/node/truth-social
- internetter 2y ago
  Yes but collective funding wouldn't be very free market of you, would it? Seriously though, it would be hilarious to see this fail as Truth Social is based[0] on Mastodon. It would be hilarious to see the free market guy go bankrupt again while the thing they stole from keeps trudging along funded by donations. [0]: https://boehs.org/node/truth-social https://boehs.org/node/truth-social
  - roenxi 2y ago
    I'm trying to piece together what parts of that comment are serious and what are heavy sarcasm. On balance, though, it seems you think something trudging along because of donations is unsupported by the free market. Do you think that? Because if you do I want to point out that donations are one of the ultimate expressions of the free market. The open source ecosystem is in fact the most extreme free market we have available in the world today. It is basically peak capitalism, and a go-to example for how an unregulated free market can generate unbelievable amounts of value (who seriously believed in the 90s that the price of software could naturally drop to $0?).
    - 2y ago
tiffanyh 2y ago
Stock up 0.5% after-hours. https://www.marketwatch.com/investing/stock/djt https://www.marketwatch.com/investing/stock/djt
tinyhouse 2y ago
I just downloaded the app and tried to sign up. Refusing to take my valid US phone number so I cannot proceed. What a joke. Tbh, with Twitter owned by Elon, the existence of Truth Social is not really needed anymore.
1270018080 2y ago
Minus the foreign money laundering/bribery and fanatic cult driving up the valuation, what do you think it's actually worth? $200 mil? I am giving it a generous 50x multiple on revenue.
- Kye 2y ago
  The entire Mastodon project including two instances (mastodon.social + mastodon.online) with about 1/3 the users between them runs on a $22k/month Patreon. And it is a fork of Mastodon, so that's a good comparison.
  - cbm-vic-20 2y ago
    This shows it's not the software or platform that matters- it's the network effect of who is using it.
    - Kye 2y ago
      It does. Billions of dollars and it can't even match a network run mostly by volunteers funded on donations with software they got for free.
listenallyall 2y ago
327 million? Gonna need to double that if it wants to match Uber. https://www.google.com/amp/s/www.cnbc.com/amp/2024/05/08/uber-uber-q1-2024-earnings.html https://www.google.com/amp/s/www.cnbc.com/amp/2024/05/08/ube...
cameldrv 2y ago
The whole thing is just a money laundering scheme. It’s illegal to give money to Trump as a donation, but if you buy the worthless shares in his company, it’s (arguably) legal, and he has a number of ways of siphoning off this cash into his own pocket. If I were investigating, I’d be looking at ways people could prove to Trump that they actually bought (and held) the shares.

73 points by miohtama 2y ago

Only an idiot would actually lose hundreds of millions on something that should just be a PC server running in a closet somewhere, on a residential broadband connection. It's probably a lie, for tax purposes. The fake loss can offset some real gain elsewhere.

rco8786 2y ago
> The fake loss can offset some real gain elsewhere. Bingo
fred_is_fred 2y ago
A rich investor dropping $10M on stock to get the inside track on the next president of the United States is a steal. Making money be damned.

miohtama 2y ago

> In Q1, the company recorded $311 million in non-cash expenses arising from the conversion of promissory notes, and the associated elimination of prior liabilities, immediately before the closing of TMTG’s merger with DWAC SPAC promoters are harsh mistresses. Hopefully Trump can get to the dumping of his shares soon, DJT share price has recovered from its lows.

killingtime74 2y ago

At many companies, tech or law firms, $770,500 is the revenue attributable to 1 employee or less

chrisco255 2y ago
I dunno there's countless tech startups that operate on low to no revenue especially in the first few years of operation.
- hn_throwaway_99 2y ago
  With a 6 billion market cap??? Grifters gonna grift...
  - chrisco255 2y ago
    Is this your first cycle in tech?
    - hn_throwaway_99 2y ago
      Please show me any other companies with a > $6 billion market cap with < $1 million in revenue, especially companies that don't have heavy up-front R&D/capital costs.
      - webninja 2y ago
        ImmunityBio, Inc. (IBRX) -Market Cap: 4.80B -Revenue (ttm): 302,000 -P/S Ratio: 15,892 -Forward P/S 161 https://stockanalysis.com/stocks/ibrx/ https://stockanalysis.com/stocks/ibrx/ Stunningly high price to sales ratio.
      - webninja 2y ago
        Annaly Capital Management, Inc. (NLY) -Market Cap: 9.95B -Revenue (ttm): -146.20M -P/S Ratio: n/a (negative) -Forward P/S: 2.32 -Company Type: Mortgage REIT https://stockanalysis.com/stocks/nly/ https://stockanalysis.com/stocks/nly/ How can revenue (not to be confused with net income or profit) be negative?
      - webninja 2y ago
        Trump Media & Technology Group Corp. (DJT) -Market Cap: 7.89B -Revenue (ttm): 2.59M -PS Ratio: 3,042.45 -Forward PS: Unknown -PB Ratio: 37.52 https://stockanalysis.com/stocks/djt/ https://stockanalysis.com/stocks/djt/ For comparison.
      - chrisco255 2y ago
        All that matters for social media companies is user growth and retention. It's always possible to monetize attention. That's why Reddit, a nearly two decade old company that posted a $500M loss last quarter, is worth $10B. Facebook didn't monetize until 5 years in, YouTube didn't really ramp up ads until at least 5 years in either. And it bled money for at least a decade. Snapchat also 4 years or so before monetization became a focus. WhatsApp barely had any revenue when it was purchased for $19B. I'm not saying Truth Social is in the same caliber at all as the above companies, but inflated tech valuations happen every single cycle (see WeWork). There's over 1200 private startups right now with a valuation over $1B, many of which have low revenue: https://www.cbinsights.com/research-unicorn-companies https://www.cbinsights.com/research-unicorn-companies

etchalon 2y ago

The damning thing isn't the loss, it's the revenue. $770,500 in revenue. $300M in losses. And there are people buying this stock.

Cheer2171 2y ago
The stock is a legal way to buy favors from Trump.
- ungreased0675 2y ago
  Can you explain that further?
  - mechagodzilla 2y ago
    Donald Trump owns ~80 million shares of Truth Social (58%). The company, as a profit-making enterprise, is basically an abject failure, but as a way to funnel money to Donald Trump, it is a roaring success. It would be frowned upon if a foreign government were to write a check to Donald Trump for, say, $100 million, but a sovereign wealth fund is perfectly capable of 'investing' a similar amount in his useless shell corporation. His stock in Truth Social, which has no possible future in which it's a profitable enterprise, is worth a few billion dollars because people with money are willing to use it as a vehicle to bypass restrictions on campaign donations.
    - fred_is_fred 2y ago
      Just like selling Bibles to churches who can’t make campaign donations. Everything with him is a grift. People need to remember that.
- JumpCrisscross 2y ago
  > stock is a legal way to buy favors from Trump It’s closer to an NFT. He doesn’t directly benefit from holders; there are more direct ways to enrich him, e.g. loans.

JumpCrisscross 2y ago

Most of that is loss non-cash option-valuation dark magic. They’re losing about $9.3mm a quarter on their operations [1]. Given their $230mm cash pile, that’s over six years of runway. The punch line is less than $1mm of quarterly revenue. [1] https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849635/000114036124026889/ef20028790_10q.htm https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849635/0...

ttul 2y ago
…Making their multiple about 1,650x ARR… Something tells me that price ain’t sustainable.
- nickthegreek 2y ago
  Only needs to be sustained til the big guy gets a large slice of the pie out.
Animats 2y ago
> In Q1, the company recorded $311 million in non-cash expenses arising from the conversion of promissory notes, and the associated elimination of prior liabilities, immediately before the closing of TMTG’s merger with DWAC. Anyone looking at the SEC filings to see whose promissory notes?
goodluckchuck 2y ago
Media is almost always a money loser, and more-often-than not a ’company paper’ a la Amazon & WaPo. Sometimes the funding is less obvious, e.g. mainstream TV, but major advertisers accept a negative return on the ads themselves in order to support the market-forming functions of the channel (impact on regulation, etc).

mikestew 2y ago

$750K in revenue? <$300 million on-hand? I'm surprised it's lasted this long. But most shocking of all: $6.6 billion-with-a-"b" market cap? Who the hell bids this shit up? Who but DJT himself would touch this stock? But while Truth Social is on it's way to being delisted, today I learned a valuable lesson: don't make the stock symbol your initials. Someone is not going to be pleased when "DJT" is a penny stock trading OTC.

rc_kas 2y ago
[flagged]
moomin 2y ago
It would not be the first company with stock ticker DJT launched by Donald Trump Jr to go bust. https://amp.cnn.com/cnn/2024/03/25/investing/trump-stock https://amp.cnn.com/cnn/2024/03/25/investing/trump-stock
ceejayoz 2y ago
> Who the hell bids this shit up? Who but DJT himself would touch this stock? Oligarchs who can’t otherwise send Trump billions in campaign contributions. Bid it up, let him sell, and suddenly he owes the bonesaw and polonium people a big favor.
- toolz 2y ago
  Trump won against hillary spending roughly half as much as she spent and spent proportionally even less to win the primaries. He's not a candidate that wins based on money, which is in contrast to almost every other election in modern US history. Maybe he is getting money in shady ways, but his funds compared to his results wouldn't suggest that is the case.
  - ceejayoz 2y ago
    He’s a candidate that owes half a billion in legal losses that put his prized real estate empire at risk.

endisneigh 2y ago

I’m very curious to the price action of this stock if trump were to win reelection.

dotnet00 2y ago
While he could probably require it to be used in addition to other platforms, I don’t think he'd be legally able to force it to be the only platform used.

throwaway4736 2y ago

[flagged]

Kye 2y ago

Meanwhile all the other Mastodon instances run on Patreon donations.

ramses0 2y ago
Wait wait... I've ignored everything political as much as I can, but don't tell me we're getting sold out on some $3B valuation of an unpopular Mastodon Instance? It never crossed my mind to consider the "tech stack" of this farce.
- internetter 2y ago
  Its ripped from Mastodon: https://boehs.org/node/truth-social https://boehs.org/node/truth-social
internetter 2y ago
Yes but collective funding wouldn't be very free market of you, would it? Seriously though, it would be hilarious to see this fail as Truth Social is based[0] on Mastodon. It would be hilarious to see the free market guy go bankrupt again while the thing they stole from keeps trudging along funded by donations. [0]: https://boehs.org/node/truth-social https://boehs.org/node/truth-social
- roenxi 2y ago
  I'm trying to piece together what parts of that comment are serious and what are heavy sarcasm. On balance, though, it seems you think something trudging along because of donations is unsupported by the free market. Do you think that? Because if you do I want to point out that donations are one of the ultimate expressions of the free market. The open source ecosystem is in fact the most extreme free market we have available in the world today. It is basically peak capitalism, and a go-to example for how an unregulated free market can generate unbelievable amounts of value (who seriously believed in the 90s that the price of software could naturally drop to $0?).
  - 2y ago

tiffanyh 2y ago

Stock up 0.5% after-hours. https://www.marketwatch.com/investing/stock/djt https://www.marketwatch.com/investing/stock/djt

tinyhouse 2y ago

I just downloaded the app and tried to sign up. Refusing to take my valid US phone number so I cannot proceed. What a joke. Tbh, with Twitter owned by Elon, the existence of Truth Social is not really needed anymore.

1270018080 2y ago

Minus the foreign money laundering/bribery and fanatic cult driving up the valuation, what do you think it's actually worth? $200 mil? I am giving it a generous 50x multiple on revenue.

Kye 2y ago
The entire Mastodon project including two instances (mastodon.social + mastodon.online) with about 1/3 the users between them runs on a $22k/month Patreon. And it is a fork of Mastodon, so that's a good comparison.
- cbm-vic-20 2y ago
  This shows it's not the software or platform that matters- it's the network effect of who is using it.
  - Kye 2y ago
    It does. Billions of dollars and it can't even match a network run mostly by volunteers funded on donations with software they got for free.

listenallyall 2y ago

327 million? Gonna need to double that if it wants to match Uber. https://www.google.com/amp/s/www.cnbc.com/amp/2024/05/08/uber-uber-q1-2024-earnings.html https://www.google.com/amp/s/www.cnbc.com/amp/2024/05/08/ube...

cameldrv 2y ago

The whole thing is just a money laundering scheme. It’s illegal to give money to Trump as a donation, but if you buy the worthless shares in his company, it’s (arguably) legal, and he has a number of ways of siphoning off this cash into his own pocket. If I were investigating, I’d be looking at ways people could prove to Trump that they actually bought (and held) the shares.