A bad week for Donald Trump. The former president of the United States is being part of a historic trial and today faces the possibility of spending time in prison. But it’s not just the judges that Trump has to worry about. An article in Forbes this week revealed that Truth Social, his social network, is costing him millions.
Truth Social was created after the former U.S. president was banned from Twitter, Facebook and Instagram over the Capitol Hill riots in 2022. Under the excuse of ‘freedom’ of speech Trump decided to create his own platform as a way to stay in communication with his followers, but also as a challenge to the social networks that expelled him.
And the truth is that the initial support for the idea showed that Trump was right. With the support of his followers when Truth Social was launched, the business was valued at close to 22 billion dollars. Why not believe in the former president’s proposal when his expulsion from Twitter proved that the Internet needed a social network aligned with the values of the most conservative sector in the United States?
But the last few months have contradicted the president. And the unexpected reason lies in Elon Musk’s acquisition of Twitter, which has made changes contrary to previous policies that have turned the social network into a much ‘friendlier’ space for Internet conservatives. Musk, for example, allowed the return of several organizations and personalities of the extreme right (including the former president), in addition to reducing moderation on the platform and promising a twitter that will only expel users when they commit ‘criminal offenses’. All these changes have turned Twitter into what Truth Social wanted it to be.
And the result is that today Truth Social’s stock is trading near $14 which has lowered the company’s valuation by 92%, close to $1.2 billion. Add to this the fact that the Department of Justice, the Securities and Exchange Commission, as well as the Financial Regulatory Agency are currently reviewing the president’s finances, including the company behind Truth Social, which means that the next few months could see the company’s price drop even further.
Hardly anyone uses Truth Social
What determines the value of a social network? Undoubtedly, the number of users it has does. Platforms of this type feed off the numbers of people using them and the impact they have within the Internet conversation. It is for this reason that it is hard to believe that Truth Social is actually worth $1.2 billion, as the platform has failed to meet the user number expectations it needs to be competitive or even relevant.
When Truth Social pitched to investors it claimed it expected to have 81 million users by 2026. But in 2023, a year after it launched, only about 5 million people are using it. The platform also receives about 100,000 new users per month, meaning it is far from competing with Twitter’s 450 million users and even seems unlikely to reach its initial expectations.
The bottom line is that media outlets such as Forbes claim that Trump’s fortune has fallen in one year from $3.2 billion dollars to just $2.5 billion dollars. These losses correspond to $550 million.