After share price rally: Trump's Truth Social now worth more than Elon Musk's X

A few days before the US presidential election, Donald Trump's Twitter alternative Truth Social has surpassed the total market value of its role model X. This was reported by the news agency AP, citing the latest figures from the financial group Fidelity, which holds shares in X. While the parent company of Truth Social has a market capitalization of more than 10 billion US dollars after a recent jump in shares, Elon Musk's X Holdings is only worth 9.4 billion US dollars. The share price of the Trump Media & Technology Group has risen dramatically in recent weeks, from a low of just under USD 12 to over USD 51.

Hoping for a Trump victory

As the New York Times explains, the stock market value of the Trump company is largely decoupled from the actual business of the social network. It is likely to continue to have significantly fewer active users than X, but also than competitors such as Threads and Bluesky. There have recently been huge losses. Instead, the price gain in recent weeks has largely paralleled the improving forecasts for Trump's result in the upcoming elections, the US newspaper quotes a market research company. The background to this would be the expectation that Truth Social could benefit if Trump is actually re-elected as US president. Should he lose, the share could therefore become "easily worthless".

The short message service Truth Social has been around since the end of 2021 and, according to external estimates, the network had around five million users in the spring. That's not particularly high for a social network. Metrics commonly used by competitors are not to be published. Overall, the service, where supposedly anything can be said and written, remains particularly popular with supporters of Donald Trump. He expresses himself almost exclusively there. Technically, Truth Social is based on the source code of the Twitter alternative Mastodon, although security loopholes closed in Mastodon may still exist in Truth Social. The two services could be linked, but have not yet been.

Truth Social is operated by Trump Media, the IPO took place at the end of March just a few days after the merger with a corporate shell, Digital World Acquisition Corp. This is a so-called Special Purpose Acquisition Company (SPAC), through which an IPO is much simpler and involves fewer requirements. Donald Trump holds the majority of the shares traded under the abbreviation "DJT" –, i.e. his initials –. Following the temporary crash, their total value has also risen again significantly. In view of the massive overvaluation of the comparatively small core business, there were several warnings against buying the shares.

(mho)