Trump bubble: How Trump's social media company is worth so much more than its business justifies

Donald Trump's personal net worth has ballooned over this past week at least on paper that is courtesy of his social media company Trump media and Technology Group which went public on Monday on its first day of trading the company rocketed to an 8 billion doll valuation making it worth more than the New York Times and Mattel and Western Union Trump himself owns about 60% of that company at this point in the story you might find yourself wondering how did we get here after all Trump media and Te

chnology group's main product truth social has just 2% of the monthly active users of Twitter or Pinterest and an even tinier fraction of the monthly users of meta and also last year truth social lost almost $50 million against just $3 million in Revenue so how is Donald Trump able to take truth social from losing tens of millions of dollars last year to being worth eight billion this year and how long can that last before the bubble bursts and can Donald Trump use any of this money to pay off t

he $175 million Bond he still owes in his New York fraud case next week joining me now Matt Goldstein business reporter from The New York Times he's written extensively on this topic for the time so he is exactly the person to ask about this complex story Matt thanks for joining me tonight um thanks for having me you know the sort of nature of this company better than most can you explain to to people who don't know where is the money coming from who is investing in this company right now well y

ou know right now most of the investors are individual shareholders they're retail investors they're about 400,000 or so when the merger took place and the Lion Share of them are actually Trump supporters um and they're not necessarily political supporters in the sense of like big donators they're basically re regular people who are true believers and not only in Trump but really in truth social and I've talked to a number of them over the past few years and it's almost like become like a religi

ous kind of thing that they really want this company to survive and they view themselves as getting in on the ground floor do you think Matt that they have any um sort of comprehension of the potential Financial Peril that could be involved here I mean I I noted in in you're reporting in the times that some of the big investors here have shorted which just to say bet against Trump shares on the assumption that the company can't continue trading at this insane valuation um Trump media according t

o S3 Partners which is an outside financial data company is now the most shorted company to merge with the spa we won't get into a spack at this juncture but it's one of the most shorted companies in the United States that seems like a what shall we call it a big red flag it is and you know and if you talk to his core base of shareholders which would also be some of his core base of support they're fully cognizant of that they could lose all their money and I talked to one the other day I think

he's qued in one of our our stories that he's willing to lose the money on the principle of trying to make this company grow um I mean you bring up the spack I mean one thing to to understand that the merger partner was this shell company that was out there for about three years before this deal closed and a lot of them were in the red for the longest time because back when this deal was first announced the stock surged to $90 and then it was hovering around 15 or 20 for much of the last two and

a half years so some of them are in the black some in the red but I I think it's almost a matter of principle for them um you know obviously I don't think anyone wants to lose all their money but they see it as something bigger than just an investment does I mean how much of this can Trump tap into right I mean he's Frozen is he's he can't sell his shares for for six months he could ask the board permission to do so but that would be akin to sort of like saying I mean it would be a real loss of

confidence right for him to pull out I don't think that I don't think that will happen I mean there's a reason why these restrictions are in place normally and it's not uncommon for any company when it first becomes public you don't want the majority shareholders to be dumping all their stock right away it's not a good sign of faith and and I can tell you the investors I've talked to they don't think Trump will do that and actually they don't want him to do that the more likely scenario is they

could ease this restriction that he can't borrow against the stock I.E use it as collateral to get a loan or to post it for a bond that he might need to pay off you know the Civil penalty I think that's a more likely scenario that could happen um we haven't seen it yet but it's only the first week of existence the it's a very let me very Trump friendly board he's no longer chairman of the company but the seven board members five of them are are clear loyalists we have Nunes the CEO former Congr

essman Don Jr his eldest son and three former Trump Administration people on the do you feel like the value of this stock is going to track Trump's candidacy which is to say as the polling goes up or down do you think that that could be reflected in the stock price yeah I think it's sort of a barometer a proxy for Trump's you know fortunes I mean again we're not going to much about the stock but the company before that it merged with it stock really took off early this year when uh Dan santis dr

opped out of the New Hampshire primary I mean the stock began to soar and before the merger the stock had been up about 140% this year alone I I actually personally think there's a good chance the stock will continue roughly around these levels at least through the election as long as the election appears to be close which every indication it's going to be I don't really see an event taking place that's going to cause the stock to Crater but then again when you're having a stock that's so overva

lued any unforeseen event can cause that we just may not know what it is at this time hey everyone MSNBC has a new and improved app you'll get realtime alerts and Analysis live blogs in-depth essays video highlights and the best 2024 election coverage download the new MSNBC app here's how to do it you tap on the App Store on your phone you hit search on the bottom right corner you type in MSNBC you click on the MSNBC app you click on get or the cloud icon and enjoy it