Trump's Inflated DJT Stock Is a "Bubble," Truth Social Is a Failure, Experts Say: A Closer Look

Late Night with Seth Meyers
28 Mar 202412:25

Summary

TLDRThe video script discusses the unexpected increase in Donald Trump's net worth following the public listing of his struggling media company, which includes the social media platform Truth Social. Despite the company's lackluster performance, with only $3.4 million in revenue and a user base that's shrinking, its stock value has skyrocketed, driven by a buying spree from Trump supporters. This has led to a surge in Trump's net worth, although experts warn that the valuation is likely unsustainable and could be a bubble that will eventually burst.

Takeaways

  • 📈 Donald Trump's net worth has unexpectedly increased significantly after his social media company went public, despite his current financial struggles and legal fees.
  • 💰 Trump has been selling various items, including Bibles on TV, in an attempt to raise funds quickly due to his urgent cash needs.
  • 🚗 Former lawyer Rudy Giuliani, who declared bankruptcy with a debt of $500 million, was seen in a video driving a car, seemingly not affected by his financial situation.
  • đŸŽ„ Trump's media company, which includes Truth Social, experienced a stock surge on its first day of trading on NASDAQ, raising questions about the sustainability of its valuation.
  • 🏩 Trump owns 60% of the Trump Media company, which on paper is worth $4.6 billion, significantly boosting his net worth.
  • 📉 Despite the stock's initial success, experts warn that Truth Social is overvalued and its business model is failing, with shrinking user base and significant revenue loss.
  • đŸ‘„ Truth Social has only 494,000 active monthly mobile users in the United States, a tiny fraction compared to other social media platforms like Twitter and Instagram.
  • 💾 Trump Media generated only $3.4 million in revenue in the first nine months of the previous year, with a loss of $49 million.
  • 🚀 The stock's value is primarily driven by Trump's brand and the enthusiasm of his supporters, which may not be sustainable in the long term.
  • 📉 Experts predict that the stock price will likely drop significantly if the company continues to lose money from operations, potentially leading to bankruptcy.

Q & A

  • What is the current financial situation of Donald Trump according to the transcript?

    -Donald Trump is facing significant financial challenges, including a need for cash and substantial legal bills. It is reported that he has spent over $100 million on legal fees.

  • What is the name of the social media company associated with Donald Trump that recently went public?

    -The social media company associated with Donald Trump is called Truth Social.

  • How has the public listing of Trump's media company impacted his net worth?

    -The public listing of Trump's media company, which includes Truth Social, has led to a significant increase in his net worth. His net worth reportedly doubled in one day, adding $4 billion to his valuation.

  • What is the current valuation of Trump's media company?

    -Trump's media company is valued at around $11 billion, based on the stock price during its first day of trading on NASDAQ.

  • What does the transcript suggest about the sustainability of the valuation of Trump's media company?

    -The transcript suggests that the valuation of Trump's media company is likely unsustainable and divorced from the reality of the business, with experts warning that it could be a bubble that may eventually burst.

  • How does the transcript describe the user base of Truth Social?

    -Truth Social has a very small user base, with only 494,000 active monthly mobile users in the United States, and it is shrinking, with monthly active users down by 51% year-over-year as of February.

  • What was the financial performance of Trump Media in the first nine months of the previous year?

    -In the first nine months of the previous year, Trump Media generated $3.4 million in revenue but lost $49 million.

  • What is the significance of Rudy Giuliani's financial situation as mentioned in the transcript?

    -Rudy Giuliani, who has declared bankruptcy with debts totaling $500 million, is mentioned as an example of financial mismanagement among Trump's associates.

  • What is the transcript's view on the comparison between Truth Social and other social media platforms?

    -The transcript portrays Truth Social as a failure in comparison to other social media platforms, with its user base being significantly smaller than platforms like Twitter and Instagram's Threads.

  • What is the transcript's stance on the investment in Trump's media company?

    -The transcript implies skepticism about the investment in Trump's media company, suggesting that it is a buying spree fueled by Trump supporters and traders, rather than based on the actual performance of the business.

  • What is the transcript's prediction for the future of Trump's media company stock?

    -The transcript predicts that the stock price of Trump's media company will likely drop significantly, with one expert suggesting it could go as low as $2 a share if the company uses up the money from the merger.

Outlines

00:00

📈 Trump's Net Worth Soars Despite Legal Troubles and Business Failures

This paragraph discusses how Donald Trump's net worth unexpectedly increased due to his failed social-media company going public, despite his desperate need for cash and mounting legal fees. It highlights the surge in stock price of his media company, which includes Truth Social, and the skepticism from experts who view it as an overvalued bubble. The paragraph also touches on the financial struggles of Trump's associates, like Rudy Giuliani, and the overall skepticism towards the sustainability of Trump's business success.

05:02

📉 Truth Social's Lackluster Performance and Overvalued Stock

The second paragraph delves into the poor performance of Truth Social, Trump's social media platform, which has generated minimal revenue and suffered significant losses. It compares the platform's user base and revenue to other social media companies and highlights the stark differences. The paragraph also criticizes the overvaluation of Trump Media's stock, questioning the investment rationale of those who have not used the platform. Additionally, it satirizes Fox News host Jesse Watters' inability to prove his use of Truth Social and points out the potential risks associated with the company's stock valuation.

10:03

đŸ›ïž Trump's Business History and the Uncertain Future of Truth Social

This paragraph reflects on Trump's history of bankruptcy filings and legal issues, questioning the viability of his current business endeavors. It highlights the contrast between his past ownership of tangible assets and his current reliance on a digital platform that has been widely criticized for its performance. The paragraph also mocks Trump's explanation for choosing NASDAQ over the New York Stock Exchange and emphasizes the precarious nature of his business, which is heavily reliant on his personal brand. Finally, it warns of the potential for the stock's value to plummet, drawing parallels to past failures.

Mindmap

Keywords

💡net worth

Net worth refers to the total value of an individual's or company's assets minus their liabilities. In the context of the video, it is used to describe the change in Donald Trump's financial status following the public listing of his media company, which includes Truth Social. The video highlights that despite the company's lackluster performance, Trump's net worth increased significantly due to the stock's surge, which is considered by experts as an 'unsustainable bubble'.

💡legal bills

Legal bills refer to the costs associated with hiring lawyers and undergoing legal proceedings. In the video, it is mentioned that Donald Trump has spent more than $100 million on legal fees, indicating his significant financial outlay to cover legal services and representation in various cases.

💡Truth Social

Truth Social is a social media platform launched by Donald Trump's media company. It is portrayed in the video as a failed venture, with dwindling user numbers and financial losses. The platform is described as a 'dumb Twitter ripoff' primarily used by Trump supporters, and it is compared unfavorably to other social media platforms in terms of user engagement and revenue generation.

💡NASDAQ

NASDAQ, or the National Association of Securities Dealers Automated Quotations, is an American stock exchange that lists and trades securities, including stocks of companies. In the video, it is mentioned that Trump's media company, which includes Truth Social, went public and started trading on NASDAQ, leading to a significant increase in Trump's net worth despite the company's poor financial performance.

💡overvalued

Overvalued refers to a situation where the market value of a company's stock or asset is higher than its intrinsic or actual value. In the context of the video, this term is used to describe the stock valuation of Trump's media company, with experts suggesting that the stock's high price does not reflect the company's true financial health or potential.

💡bankruptcy

Bankruptcy is a legal process that allows a person or business that cannot pay their debts to get a fresh start. In the video, the term is used to highlight the financial troubles of both Donald Trump's media company and his former lawyer, Rudy Giuliani. The video suggests that the company's financial situation and the bankruptcy of Giuliani illustrate the precarious financial state of Trump's ventures.

💡bubble

A bubble in financial terms refers to a situation in a financial market where asset prices significantly exceed their intrinsic values, creating a temporary surge in prices that is not sustainable and will eventually burst, leading to a sharp decline. In the video, the term is used to describe the inflated stock price of Trump's media company, which is considered detached from the company's actual performance and prospects.

💡revenue

Revenue refers to the income that a business receives from its operations, such as from the sale of goods or services. In the video, the revenue of Trump's media company is highlighted to demonstrate its financial performance, with the company generating only $3.4 million in the first nine months of the previous year and incurring a loss of $49 million during the same period.

💡active users

Active users are individuals who engage with a platform or service within a given time frame. In the context of the video, this term is used to discuss the user engagement of Truth Social, with the platform experiencing a significant decline in active monthly mobile users, indicating a lack of user interest and potential for future growth.

💡valuation

Valuation is the process of determining the economic value of an asset or a company, often based on its financials, market conditions, and potential for future growth. In the video, the valuation of Trump's media company is discussed as being extremely high despite the company's poor financial performance, leading to skepticism about its sustainability.

💡meme stock

A meme stock is a term used to describe a stock that increases in price primarily due to social media hype and momentum-driven buying, rather than the company's underlying fundamentals. In the video, the comparison of Trump's media company to a meme stock suggests that its stock price surge is driven by popularity and fervor among a certain group of investors rather than the company's actual business performance.

Highlights

Donald Trump's net worth unexpectedly increases due to his failed social-media company going public.

Trump is in desperate need of cash, having spent over $100 million on legal fees.

Rudy Giuliani, Trump's former lawyer, has declared bankruptcy with debts of $500 million.

Trump's media company, including Truth Social, surges in its first day of trading on NASDAQ.

Trump owns 60% of the new Trump Media company, a stake worth $4.6 billion on paper.

Trump's net worth rose by $4 billion in one day, despite his social-media company being considered otherwise worthless.

Truth Social is described as a 'dumb Twitter ripoff' for MAGA supporters, with negative user growth and huge financial losses.

Experts warn that the stock valuation of Trump's company is extremely overvalued and likely temporary.

Truth Social has only 494,000 active monthly mobile users in the United States, a fraction of other social media platforms.

Trump Media generated only $3.4 million in revenue and lost $49 million in the first nine months of last year.

The company's revenue is so small it qualifies as a small business by federal government standards.

The stock market windfall is not reflective of the business's reality and is instead fueled by Trump supporters.

The company's valuation is compared to that of Reddit, highlighting the disparity in user base and financial performance.

Trump's explanation for not listing on the New York Stock Exchange is criticized as nonsensical.

The company's filings acknowledge that Trump's legal issues could negatively impact the company's value.

The stock price is considered a bubble that may eventually drop significantly if the company spends through its merger funds.

Trump's past businesses, such as Trump Hotels & Casino, have filed for bankruptcy.

The paper value of Trump's stock is far removed from the actual performance of his current business.

Transcripts

00:02

-Just as he's drowning in legal bills

00:03

and in desperate need of cash,

00:04

Donald Trump's net worth has unexpectedly soared

00:07

after his failed social-media company went public

00:10

in what experts are calling an "unsustainable bubble

00:12

that is divorced from the reality of the business."

00:14

For more on this, it's time for "A Closer Look."

00:16

[ Cheers and applause ]

00:20

I don't need to tell you,

00:22

Donald Trump needs cash, and he needs it ASAP.

00:24

The guy's been hawking Bibles on TV

00:26

like he's trying to raise money to go to Jesus camp.

00:31

"The New York Times" reported this week

00:32

that he's spent more than $100 million on legal fees.

00:35

Now, I don't know what Trump's current lawyers

00:37

are doing with all that money,

00:39

but I can guess what his former lawyers would do with it,

00:41

based on what they're doing without it.

00:43

Rudy Giuliani, who recently declared bankruptcy

00:46

and declared debts totaling $500 million,

00:49

posted a video of himself this week behind the wheel

00:53

of what I can only assume is either a convertible

00:55

or a car missing its roof,

00:58

under the caption, "Driving with the top down."

01:03

Alright, I think I'm out on this "Thelma and Louise" reboot.

01:07

Knowing Rudy, he would probably miss the cliff.

01:09

By the way,

01:11

driving with the top down sounds like a euphemism

01:13

you'd use about Rudy Giuliani.

01:15

"I dunno.

01:16

I don't know if you should hire that guy.

01:18

Let's just say he's, uh, driving with the top down."

01:21

[ Laughter ]

01:23

Also, who's holding the camera in this video?

01:25

Who in their right mind would get in a car with the guy

01:29

who mistook the Four Seasons landscaping company

01:32

for a luxury hotel?

01:34

He probably thinks these road signs are suggestions.

01:37

[As Giuliani] Uh-oh! You know what that means.

01:38

We gotta drive crazy now!

01:41

Don't worry. The next sign says

01:42

"Only Rudys allowed."

01:44

[ Laughter ]

01:46

[Normal voice] So, Trump desperately needs money.

01:48

Now, Trump has spent his entire life wriggling his way

01:51

out of seemingly impossible jams.

01:53

But surely, surely,

01:55

there's no escape hatch for him this time, right?

01:58

-More breaking news tonight involving Donald Trump.

02:00

His media company, which of course includes Truth Social,

02:03

soaring in its first day of trading on NASDAQ,

02:06

surging 56% at one point during trading to $78 a share

02:09

before closing at $58.

02:11

-Trump now owns 60% of the new Trump Media company,

02:14

or roughly $78 million a share --

02:17

a stake that is, on paper at this hour,

02:20

worth $4.6 billion.

02:24

-The higher the stock goes,

02:25

the higher that Donald Trump's net worth is.

02:28

At yesterday's close,

02:29

Trump's net worth, according to Bloomberg,

02:31

a little over $7 billion.

02:32

It went up by $4 billion on Monday alone.

02:36

-That's right, Trump doubled his net worth in one day

02:39

after his otherwise worthless

02:40

social-media company went public.

02:42

This brings us to a segment called...

02:48

[ Laughing ]

02:50

I mean, I don't...

02:52

[ Laughing ] I don't understand.

02:55

So he doubles his net worth out of nowhere...

02:57

[ Laughing ]

02:59

...based on a worthless business, just in time to...

03:02

[ Laughing ]

03:04

...pay off the hundreds of millions he owes in fines

03:07

from lying about the value of --

03:08

I just don't -- I don't get it!

03:10

[ Laughter ]

03:12

[ Laughing maniacally ]

03:23

[ Scream-laughing ]

03:28

This has been "Seth Tries to Laugh About a Thing

03:30

That is Clearly Making Him Crazy."

03:33

Now, you might be asking yourself,

03:37

"Donald Trump has a media and technology company?"

03:39

And the answer is no, he doesn't.

03:40

What he has is a dumb Twitter ripoff

03:43

for MAGA trolls called Truth Social,

03:45

where he posts insane, typo-riddled, all-caps screeds.

03:48

You may have seen one of his posts

03:50

when someone else screen-grabs it and then puts it on Twitter.

03:52

Truth Social has been an abject failure,

03:55

has lost millions of dollars, and is hemorrhaging users.

03:59

-Experts warn the stock is extremely overvalued,

04:03

saying its staggering multi-billion dollar valuation

04:06

is likely a flash in the pan.

04:08

Truth Social has been racking up huge losses,

04:11

and as of last month,

04:13

only had some 494,000 active monthly mobile users.

04:18

-Truth Social is tiny.

04:20

We're talking about less than half a million

04:22

monthly active users on iOS and Android

04:24

in the United States.

04:26

For comparison, X, the company formerly known as Twitter,

04:29

it has 75 million users.

04:32

Even Instagram's Threads is 10 times bigger than Truth Social.

04:35

Not only that, but Truth Social is shrinking.

04:38

Monthly active users are down

04:40

by 51% year-over-year in February.

04:43

-Trump Media generated just $3.4 million of revenue

04:46

through the first nine months of last year, according to filings.

04:49

The company lost $49 million over that time period.

04:53

-The only way this business could be any more of a failure

04:55

is if, every time you opened an account,

04:57

you got a free Zune, a bottle of Crystal Pepsi,

04:59

a Blockbuster card, a Motorola flip phone

05:01

that came preloaded with a Myspace account,

05:03

and a round-trip

05:04

next to the door on Alaska Airlines.

05:06

So, just to recap, not only is Truth Social

05:09

a tiny business that generated only $3 million in revenue

05:12

while losing $49 million, it's also shrinking,

05:16

with unique visitors down 20% and active users down 51%.

05:20

Its revenues are so small -- and this is true --

05:23

it actually qualifies for the federal government's

05:25

definition of a small business,

05:27

which has revenue ranging from $1 million to over $40 million.

05:30

By comparison, here's how much money

05:32

Squatty Potty,

05:33

the plastic step stool you put your feet on

05:35

while you go to the bathroom,

05:37

made after it went on "Shark Tank."

05:39

-Squatty Potty has partnered with over 20 major retailers.

05:42

We're also in 20 countries all over the world.

05:44

We've now done $175 million in sales

05:48

since "Shark Tank."

05:49

-$175 million!

05:50

For something that helps you [bleep]

05:52

Compared to Truth Social,

05:53

which I guarantee is something

05:55

Trump does while he [bleep]

05:57

Trump's stock market windfall has nothing to do

05:59

with the reality of his business,

06:00

and that's obvious to everyone.

06:02

It's just a buying spree fueled by Trump supporters

06:04

and traders capitalizing on

06:06

the enthusiasm of Trump supporters.

06:08

I'm willing to bet most of the people investing

06:10

in this company have never even used Truth Social.

06:12

Here's an exchange from Fox News,

06:15

in which host Jesse Watters claimed he used the site

06:17

but wouldn't prove it.

06:19

-In the last nine months of 2023,

06:21

Truth Social generated $3.4 million,

06:23

and it lost $49 million in that span.

06:27

The valuation, which is $11 billion.

06:29

Compared to Reddit --

06:31

Right? Something that we've all been on, right? --

06:33

their valuation was $6.4 billion.

06:36

So, you think that a site

06:37

that has less than half a million users...

06:39

I mean, this is what -- These are facts.

06:42

-All these valuations are ridiculous, Jessica.

06:44

-Okay, then he's the Game-- It's like GameStop, right?

06:46

It's a meme, no? -Okay, you know what?

06:48

-You know how you look at this? -Well, it's actually not,

06:49

because I'm using it. -You look at this --

06:50

-Oh, you're on Truth Social? -I'm on Truth Social.

06:52

-Show it to me. -I'm not having you

06:54

look at my phone. -Show me your phone.

06:56

-[ Laughter ] -How dare you?

06:57

-Why won't you show her your phone?!

07:01

Oh, is the only app Candy Crush,

07:03

and do you have it downloaded twice?

07:05

Seriously, Jesse, why won't you show us your phone?

07:07

Is it because you're afraid we'll see the video

07:09

you took of Rudy driving his car?

07:11

[ Laughter ]

07:14

Trump himself seems to have no idea how the business works.

07:17

For example, the special acquisition company

07:19

Trump Media merged with is listed on the NASDAQ

07:21

rather than a larger New York Stock Exchange.

07:23

But when he tried to explain why,

07:25

Trump offered a mind-boggling and nonsensical answer.

07:27

-Truth Social is doing very well.

07:30

It's hot as a pistol and doing great, and it's going public.

07:33

And the New York Stock Exchange wants to have us badly.

07:36

And I told them we can't do the New York Stock Exchange.

07:38

You're treated too badly in New York.

07:40

We don't want to do the New York Stock Exchange.

07:43

And the people at the Stock Exchange are very,

07:45

very upset about it.

07:47

The top person is -- is mortified.

07:50

Can't believe it.

07:51

He said, "I'm losing business because of New York,

07:53

because people don't want to be in New York

07:55

and they don't want to go on the New York Stock Exchange."

07:57

-Alright. A couple things.

07:58

First of all,

08:00

the top person at the New York Stock Exchange is a woman,

08:01

so that story is obviously made up,

08:03

unless Trump is claiming he had a conversation with the bull.

08:06

[As Trump] The top person at the stock exchange came up to me.

08:09

Big bull, strong bull,

08:10

huge nuts,

08:12

tears in his eyes,

08:14

pouring down to his solid bronze snout.

08:15

And he said to me, he said,

08:17

"Mr. Trump, sir, the reason I'm frozen in place

08:19

is 'cause I'm so scared to be in New York."

08:22

[Normal voice] Second, the NASDAQ is also based in New York.

08:24

Third, you don't need to literally live in New York

08:26

to list a company on either the NASDAQ

08:28

or the New York Stock Exchange.

08:30

If Swiss company Nestle wanted to trade on the NASDAQ,

08:33

the CEO wouldn't have to move from Zurich

08:35

to a studio apartment in Bushwick.

08:36

[High-pitched European accent] "But I don't have room

08:38

for all my delicious chocolate!"

08:40

[Normal voice] I'm gonna assume the CEO of Nestle is a gnome,

08:43

and if it's not, don't ruin it for me.

08:47

And yet, despite the reality of the underlying business,

08:50

the stock debuted at nearly $7 billion in value,

08:54

thanks to a buying spree from Trump supporters,

08:56

which does not mean it'll stay there.

08:58

The stock's value is based entirely on one thing,

09:01

which is Trump's brand, and in its own SEC filings,

09:04

the company admitted Trump could tank the value.

09:07

They wrote that an adverse outcome

09:08

in one or more of the ongoing legal proceedings

09:11

in which President Trump is involved

09:12

could negatively impact the company,

09:14

and that a number of companies

09:15

that were associated with President Trump

09:17

have filed for bankruptcy.

09:18

There can be no assurances

09:20

that this will not also become bankrupt.

09:22

Uhh, sell, sell! Sell, sell, sell, sell!

09:25

Sell, sell, sell, sell, sell!

09:28

Nah, that was -- that was for a different thing.

09:30

[ Laughter ]

09:32

I thought this was foolproof!

09:34

Jesse Waters uses it!

09:35

[ Laughter ]

09:37

One expert told CNN that the stock price is clearly a bubble.

09:40

"I'm reasonably confident the stock price will eventually drop

09:43

to $2 a share, and could go even below that

09:45

if the company blows through the money it got from the merger."

09:47

Oh man, $2. If that happens, Trump's gonna be...

09:50

-Hot as a pistol.

09:51

-In fact,

09:53

that's basically already happened to Trump.

09:54

Trump once had a publicly traded company

09:56

with the exact same ticker symbol, DJT.

09:58

The company went public in 1995,

10:00

and then this happened in 2004.

10:03

-Trump Hotels & Casino files for bankruptcy.

10:06

-His Trump Hotels & Casino empire have filed

10:10

for chapter 11 bankruptcy protection.

10:12

The filings list $1.3 billion in debt.

10:15

-And that was when he had actual stuff, like real buildings.

10:18

Now all he has is a website

10:20

where he misspells words, like "Buden" and "grest,"

10:22

a real thing he did this week on Truth Social.

10:26

No other successful company does that.

10:27

I've never logged on to Amazon and noticed

10:29

they accidentally spelled their name with an extra "O."

10:32

[ Laughter ]

10:33

The paper value of Trump's stock

10:35

is wildly divorced from the reality

10:37

of the underlying business, which is an abject failure.

10:39

There's a good chance

10:41

that eventually the bubble will burst.

10:42

It all hinges on Trump,

10:44

a guy whose businesses have filed for bankruptcy

10:45

four times and who's in so much legal trouble

10:48

his house was raided by feds

10:49

looking for classified documents and yelling...

10:51

-Show me your phone!

10:52

-This has been "A Closer Look."

10:55

[ Cheers and applause ]

10:59

Hey, I hope you enjoyed "A Closer Look,"

11:01

and if you didn't, why are you still watching?

11:04

[ Laughter ]

11:05

Why would you stay for this part?

11:07

Anyway, did you know that we also have something on our show

11:10

called "Corrections"?

11:11

We tape it right after the audience leaves on Thursday,

11:14

and right after our cameraman, Buck,

11:16

does a whole tank of nitrous.

11:17

[ Laughter ]

11:24

It's full of inside jokes like that

11:26

that you couldn't possibly get...

11:28

[ Laughter ]

11:29

...unless you go all the way back to the beginning.

11:32

That's right.

11:33

I'm not telling you to watch "Corrections" starting today.

11:36

I'm telling you to go back and watch from episode one.

11:39

If you miss even one, the whole thing is [bleep]

11:42

[ Laughter ]

11:47

It's easily over 20 hours at this point.

11:51

It was nominated for an Emmy in 2021, in 2022, and never again.

11:57

[ Laughter ]

12:01

So the arrow is pointing down.

12:04

"Corrections." It posts every Friday.

12:07

Give it a look. And, oh, one more thing --

12:09

I do a podcast with my brother. [bleep] you!