Valuing $DJT: Brand vs. Performance | All-In Podcast

Summary

The transcript discusses the recent public listing of Trump's social media company, with its stock ticker DJT. Despite a reported $60 million loss and lack of disclosed user metrics, the company is projected to have significant revenue growth. The conversation highlights the unusual nature of the company's valuation, comparing it to David Bowie's innovative 'Bowie Bonds'. It also touches on the potential motivations behind the stock's popularity, including support for Trump and a reaction against traditional media and perceived political persecution.

Takeaways

• 📈 Trump's social media company, TMTG, has gone public with the ticker symbol DJT, and is projected to have $4.5 million in revenue despite a $60 million loss.
• 🔍 TMTG is not disclosing traditional KPIs such as user metrics, focusing instead on strategic evaluation and growth.
• 💰 The company's valuation is comparable to Reddit's, despite having significantly less revenue and user engagement.
• 🕵️‍♂️ An SEC investigation into alleged insider trading involving three men who profited from the merger of Trump's company has led to fraud and conspiracy charges.
• 🎉 The public listing of DJT is seen as a significant milestone, drawing comparisons to David Bowie's innovative 'Bowie Bonds' from 1997.
• 💭 The valuation of DJT is partly attributed to the monetization of Donald Trump's brand, name, and likeness, similar to a modern instantiation of the Bowie Bond concept.
• 🔥 The stock's performance is fueled by a demand for alternative media and a reaction against traditional media's perceived bias.
• 🚀 Some investors view the purchase of DJT stock as a form of protest vote against the perceived 'lawfare' against Donald Trump.
• 📉 Despite the high valuation, there are concerns about the company's fundamentals and the sustainability of its current market value.
• 🚫 Shorting DJT is discouraged due to the risk of a highly motivated and large group of buyers who could drive the stock price higher.
• 🎲 The discussion highlights a shift from fundamental-based stock trading to more speculative and gamified investment behaviors.

Q & A

What is the recent development regarding Trump's social network?

Trump's social network, Truth Social, has become publicly traded under the ticker symbol DJT. The company is projected to have $4.5 million in revenue despite a $60 million loss.

How does Trump's company differ from traditional companies in terms of key performance indicators (KPIs)?

Trump Media and Technology Group (TMTG), the company behind Truth Social, has chosen not to disclose traditional KPIs such as sign-ups, average revenue per user, ad impressions, and active user accounts. They believe focusing on these could divert attention from strategic evaluation and growth of the business.

What is the estimated value of visits to Trump's social network in the last month?

According to SimilarWeb estimates, Truth Social had about 5 million visits last month.

How does the market capitalization of Trump's company compare to Reddit?

As of the discussion, Trump's company has a market cap of about $8.5 billion, similar to Reddit's. However, Reddit has a significantly higher revenue of $800 million compared to Truth Social's projected $4.5 million.

What is the significance of the SEC investigation mentioned in the transcript?

The SEC investigation was into three men allegedly making $23 million by buying and then dumping shares of DWAC (Digital World Acquisition Corp.), the company that merged with Trump's social media venture, after the merger was announced. These individuals faced fraud and conspiracy charges.

What is the Bowie Bond mentioned in the transcript?

The Bowie Bond, issued by David Bowie in 1997, was a financial instrument where investors bought a piece of Bowie's past work, and were paid interest based on royalties from his pre-1990 albums. It was a pioneering example of a celebrity monetizing their brand and likeness.

How is the concept of the Bowie Bond related to the current trend of celebrities going public?

The Bowie Bond was an early instance of a celebrity monetizing their name and likeness through debt. Today, celebrities like Donald Trump going public represents a more sophisticated version of that movement, where their personal brand and recognition are linked to the value of a company's stock.

What does the Goodwill line item on a company's balance sheet represent?

Goodwill on a company's balance sheet represents the intangible value that is not represented by the company's physical assets or liabilities. It often reflects the reputation, brand recognition, and customer relationships that contribute to the company's overall value.

What is the argument made in the transcript about the value of Donald Trump's brand?

The argument is that the valuation of Trump's company, as reflected in its stock price, is partly a proxy for the value of his brand. People may be buying the stock as a vote against traditional media and as a support for Trump, rather than solely based on the company's financial performance.

What is the 'populist reaction' mentioned in the transcript?

The 'populist reaction' refers to the support from Trump's base against what they perceive as 'lawfare' against him, or the use of legal tactics to harass or disadvantage him. The purchase of DJT stock by his supporters is seen as a form of protest vote and a show of support against these legal challenges.

What is the key individual risk associated with investing in a company tied to a celebrity's name?

The key individual risk, or 'keyman risk', is the potential negative impact on a company if the celebrity associated with it were to face legal troubles, health issues, or death. This risk is significant because the company's value is closely tied to the public persona and actions of the individual.

What is the warning given about shorting the stock of a company with a passionate fan base?

The warning is that shorting such a stock can be extremely risky due to the potential for the stock price to be driven up significantly by a large, motivated group of people buying the stock, as a form of support for the celebrity associated with it. This can lead to substantial losses for short sellers.