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In reply to the discussion: No, Trump is not getting $3 billion from Truth Social [View all]LetMyPeopleVote
(146,489 posts)35. DJT is a meme stock that relies on the greater fool/idiot theory
Meme stocks rely on the greater fool theory. I was amused to see that DWAC/Trump Media is classified as a meme stock where the value is due to personality and not due to the real value of issuer of the meme stock. This article is a good discussion of the meme nature of DWAC/TMT.
https://www.vanityfair.com/news/donald-trump-truth-social-media-merger
Trumps financial future now hinges on some of the strangest fads in corporate financememe stocks, SPAC deals, and cult-of-personality investing. If Trump can find a way to act fast, it might just be the bailout he desperately needs.
Truth Social is a bad imitation of Twitter, where Trump was an unavoidable presence long before he ran for president. Its chock full of stale red-pilled memes, MAGA conspiracy theories, and of course, Trump. Thats the main draw. Truth Social is the only place the former president now regularly posts his unfettered thoughts......
DWAC is best thought of as a meme stock. You may remember the meme stock fad from when retail investors on Reddit successfully coordinated a short squeeze with GameStop stock, before glomming onto a series of other millennial nostalgia brands like AMC Entertainment, BlackBerry, and Bed Bath & Beyond. Meme stocks are often publicly traded companies that attract an inordinate percentage of individual investors and their stock performance fluctuates in a way thats significantly divorced from the reality of their underlying business. Combine those two trends and youll start to see why Trumps media company could be valued at roughly $9 billion if it merges with DWAC.
Jay Ritter, a finance professor at the University of Florida, says meme stocks often depend on the greater fool theory of investing, meaning rational investors might buy in expecting the stock price to rise and betting that they can sell their shares to a greater fool willing to buy them at a higher price. In this case, however, Ritter speculates there is an inordinate number of individual retail investors compared to institutional investors, such as hedge funds, that normally own SPAC shares prior to a merger. Here youve got ideology involved [too]as far as I can tell, the vast majority of DWAC investors are Trump political investors, and theyre to some degree putting their money where their mouth is My suspicion is most of them have bought the stock as a show of political support. In this way, Trump is conducting yet another public fundraising from his supportersthis time through the public markets.
Truth Social is a bad imitation of Twitter, where Trump was an unavoidable presence long before he ran for president. Its chock full of stale red-pilled memes, MAGA conspiracy theories, and of course, Trump. Thats the main draw. Truth Social is the only place the former president now regularly posts his unfettered thoughts......
DWAC is best thought of as a meme stock. You may remember the meme stock fad from when retail investors on Reddit successfully coordinated a short squeeze with GameStop stock, before glomming onto a series of other millennial nostalgia brands like AMC Entertainment, BlackBerry, and Bed Bath & Beyond. Meme stocks are often publicly traded companies that attract an inordinate percentage of individual investors and their stock performance fluctuates in a way thats significantly divorced from the reality of their underlying business. Combine those two trends and youll start to see why Trumps media company could be valued at roughly $9 billion if it merges with DWAC.
Jay Ritter, a finance professor at the University of Florida, says meme stocks often depend on the greater fool theory of investing, meaning rational investors might buy in expecting the stock price to rise and betting that they can sell their shares to a greater fool willing to buy them at a higher price. In this case, however, Ritter speculates there is an inordinate number of individual retail investors compared to institutional investors, such as hedge funds, that normally own SPAC shares prior to a merger. Here youve got ideology involved [too]as far as I can tell, the vast majority of DWAC investors are Trump political investors, and theyre to some degree putting their money where their mouth is My suspicion is most of them have bought the stock as a show of political support. In this way, Trump is conducting yet another public fundraising from his supportersthis time through the public markets.
Idiots who purchase meme stocks are betting that they can get out before the other idiots figure out that the stock is worthless
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True. But the use of the SPAC is done specifically so the SEC WON'T be keeping an eye on it.
Scrivener7
Mar 26
#3
Not till the merger goes through, and not till he has enough collateral on paper that Deutsch Bank or
Scrivener7
Mar 26
#7
The collateral is his stake in the stock on paper. Which is now at $73 per share.
Scrivener7
Mar 26
#11
The price this morning is $73. If that holds, he'll get a lot more than $3 billion.
Scrivener7
Mar 26
#14
How ridiculous. Just goes to show how great is to have my retirement dependent on a market of nonsense.
SouthernDem4ever
Mar 26
#21
In Feb, when the stock worth was estimated at $48, the estimate of the value of his personal stake was $3.8 billion.
Scrivener7
Mar 26
#30
So I wonder which is correct. Morningstar and Marketwatch are both decent sources.
Scrivener7
Mar 26
#37
Thanks for this post that clearly breaks down the truth social stock situation. n/t
iluvtennis
Mar 26
#19
Yes, it does for me. It says there is no immediate $3 Billion windfall for trump. He has to wait 6 months
iluvtennis
Mar 26
#32