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.

Outlines

00:00

📈 Trump's Social Media Venture Goes Public

The paragraph discusses the public trading debut of Donald Trump's social media venture, which is now listed under the ticker symbol DJT. Despite a reported $60 million loss, the company is projected to have substantial revenue. Interestingly, the company is choosing not to disclose traditional key performance indicators such as user metrics, suggesting a focus on strategic growth over immediate user statistics. The conversation highlights the company's valuation, comparing it to other media platforms like Reddit, and touches on the potential implications of the platform's growth and the legal issues surrounding its launch.

05:00

💡 The Modern Bowie Bond:名人品牌价值的资本化

This section draws a comparison between David Bowie's innovative 'Bowie Bonds' from the 1990s, which were financial instruments based on the future revenue of his music, and the current phenomenon of名人 like Donald Trump capitalizing on their brand value through public companies. The discussion suggests that the DJT company represents a similar concept in the modern context, with its value tied to the enterprise value of Donald Trump's personal brand. It also explores the idea of other celebrities potentially following suit, using their influence and recognition to generate significant goodwill and value in the market.

10:01

🚀 Speculative Trading and Political Support

The paragraph delves into the speculative nature of the stock market and the role of political support in influencing the valuation of Trump's publicly traded company. It suggests that beyond the financial aspects, the stock is being used as a form of protest vote by Trump's supporters against what they perceive as 'lawfare' against the former president. The conversation also touches on the potential risks and rewards of investing in such a stock, highlighting the influence of social media and the gamification of trading on the current market dynamics.

15:02

🤝 The Intersection of Fame and Finance

This section continues the discussion on the intersection of fame and finance, exploring the idea of名人 using their influence to create value in the stock market. It compares the concept to Richard Branson's Virgin Group, where the brand's licensing model has created significant value over time. The conversation also addresses the risks associated with investing in a company based on a single individual's brand, including the potential exclusion of other assets or revenue streams from the valuation. The paragraph concludes with a reflection on the political and financial motivations behind the investment in Trump's social media venture.

Keywords

💡Memes

In the context of the video, memes refer to internet content that has been used humorously or satirically, often with images and text, to create a viral effect. This content is associated with generating significant revenue or value for Trump's social network, illustrating the power of viral marketing and the internet culture's impact on business valuations.

💡Social Network

A social network, as discussed in the video, is an online platform that enables users to build social connections, share content, and engage in various forms of communication. In this case, it specifically refers to Trump's social media platform, which is seen as an alternative to traditional social media outlets and is a subject of public trading and valuation discussions.

💡Publicly Traded

Publicly traded refers to a company's stocks being available for purchase and sale on one or more stock exchanges, open to the general public. This is significant as it indicates that the company's financial performance is subject to market forces and investor sentiment, as seen with Trump's social media platform.

💡Revenue and Loss

Revenue and loss are financial terms that represent the income generated and the expenses incurred by a company during a specific period. In the context of the video, these terms are used to discuss the financial performance of Trump's social media platform, emphasizing the contrast between its revenue projection and its operational losses.

💡User Metrics

User metrics are quantitative measures that assess the engagement, behavior, and demographics of users on a platform. In the video, the company's decision not to disclose user metrics is highlighted as a strategic move away from traditional key performance indicators, aiming to focus on the broader strategic evaluation of the business's progress and growth.

💡Market Capitalization

Market capitalization, or market cap, is the total value of all a company's outstanding shares of stock. It is calculated by multiplying the stock's current price by the number of outstanding shares and is used as a measure of a company's size and investment appeal. In the video, market cap is used to compare the valuation of Trump's social media platform with other established platforms like Reddit.

💡SEC Investigation

An SEC (Securities and Exchange Commission) investigation refers to a formal inquiry conducted by the regulatory body to ensure compliance with securities laws and regulations. In the context of the video, it highlights the legal and regulatory challenges faced by the company before its public trading debut.

💡Goodwill

Goodwill in accounting refers to the intangible value associated with a company's brand, reputation, and customer relationships, which contributes to its overall asset value. In the video, goodwill is discussed as a significant line item on the company's balance sheet, reflecting the value of Donald Trump's name and brand.

💡Populist Reaction

A populist reaction is a response from the general public, often driven by a desire for change or a pushback against established systems or institutions. In the video, it is suggested that the support for Trump's social media platform is partly a populist reaction against traditional media and perceived lawfare against Donald Trump.

💡Lawfare

Lawfare is the use of legal tactics, often involving litigation, to achieve political or strategic objectives. In the video, it is implied that certain legal actions against Donald Trump are seen as lawfare, with his supporters viewing these actions as politically motivated attacks rather than legitimate legal processes.

💡Keyman Risk

Keyman risk refers to the potential negative impact on a company's value and operations if a key individual, such as a founder or CEO, is unable to contribute due to reasons like death, illness, or legal troubles. In the video, this concept is used to discuss the risks associated with investing in a company that is closely tied to the reputation and actions of a single individual, such as Donald Trump.

Highlights

Trump's social media company goes public, symbol DJT.

Company is on pace for $4.5 million in revenue on a $60 million loss.

User metrics are not being disclosed, focusing on strategic evaluation instead of traditional KPIs.

Similar Web estimates show Truth Social had about 5 million visits last month.

Company's market cap is about $8.5 billion, comparable to Reddit.

Reddit had 2 billion visits last month with 73 million daily active users.

SEC investigation into alleged insider trading after the merger announcement.

David Bowie issued 'Bowie Bonds' in 1997, monetizing his past work.

DJT represents a modern version of the Bowie Bond, trading on the value of Trump's brand and recognition.

Goodwill on the balance sheet will represent the value of Trump's name.

Investment could be seen as a vote against traditional media and censorship.

Supporters buying stock as a populist reaction against lawfare against Trump.

Trump's enemies see the SPAC as a lifeline for him, while supporters view it as support.

Stock market has shifted from fundamental-based trading to more speculative and gamified activities.

Keyman risk involved with investing in a company tied to one individual.

Trump could contribute his brand licensing revenue to the company for a more comprehensive valuation.

Investors should be clear on what they are buying into, as the company's current valuation seems detached from its actual business performance.

The stock's performance may be more of a protest vote and a reaction to political actions rather than a reflection of its intrinsic value.

Gamified investment platforms like Robinhood and zero-day options have changed the landscape of stock trading.

Shorting the stock could be risky due to the highly motivated and large base of Trump supporters.

Transcripts

all right Trump just made5 billion on

paper with his memes back Trump's social

network has finally desp backed it's now

publicly traded you can go by Donald

Trump's back at

djt is the ticker

symbol they are on Pace for a whopping

$4.5 million in revenue on a $60 million

loss they're growing like 3x

year-over-year

and the company is not disclosing any

user metrics this quote from one of

their recent filings is next level at

this juncture in its development

tmtg the Trump media and Technology

Group believes that adhering to

traditional kpis such as signups average

revenue per user ad Impressions and

pricing or active user accounts

including monthly and daily active users

could potentially divert its focus from

strategic evaluation with respect to the

progress and growth of its business so

they're not tracking isn't that the

business I it's so laughable like you

can barely get through it that's crazy

they said that literally they said it

it's a quote from their SEC filing

according to similar web estimates truth

social had about five five million

visits last month as of Thursday morning

it's worth about 8.5 billion same as

Reddit or close to 2,000 times Topline

Revenue company had about $300 million

in cash after the merger by comparison

Reddit uh has 800 million in Revenue

their Market caps 8.4 billion or about

10 times Revenue so uh it should be

about 5 six seven times Revenue would be

more realistic according to basic media

comps Reddit had two billion visits last

month with 73 million daily active users

that's pretty significant uh this spack

took a long time to close there was an

SEC investigation into three men

allegedly making 23 million buying then

dumping shares of

dwac after the merger was announced they

all faced at least five fraud and

conspiracy charges of course this is

what happened before it was despa and

so what do you think Jam thoughts on

this or I I just think we should be

really clear

because you're just floating this

insider trading thing out there as part

of the introduction which is a huge

allegation and we have to be really

clear that is related to a few investors

and not to the company self and their

the company spack was approved by the

SEC so I just think have to be clear

Char yeah just to be super clear SEC

charges former dwac board member and

others for insider

trading dwac I just don't think this is

the story this is just this is the

reason it was delayed so just to be

clear it was the whole this whole

thing's been delayed for a couple years

because of this okay fine so it was

delayed the SEC approved it the company

is now trading yeah what do you think of

the valuation and that's the real topic

isn't it here's what I'll say I think

that this is a really important

watershed moment and it reminds me of

1997 Nick throw this little image up in

1997 David Bowie issued what was then

famously called a Bowie Bond it was $55

million that yielded 75% which is about

80 bips above the 10e at the time these

were 10year bonds that's awesome I

didn't know that the bond payments were

linked

to 20 albums that Bowie had released

before

1990 and so these are like 280 songs and

what he basically said was like listen

folks you're essentially buying a piece

of me and in this case my past work and

I'm going to take this $55 million

upfront and you're going to get paid

this interest based on the royalties

that I generate off that historic

library for a 10-year period we think

you're going to get paid the $ 55

million plus a 7 a half% a year and then

I'm going to take back the rights and if

I default if these bonds default you

will own the

songs and it turned out that it was an

incredible bet the people that bought it

I think it was credential which was an

insurance I think it's an insurance

company they got paid the bonds did not

default in 2007 Bowie took

back the ownership of that catalog of

that back catalog but instead what he

had was 55 million up front which

allowed him to go and buy all kinds of

other parts of his catalog that that he

didn't otherwise own so why is this

interesting this was the first example I

think of people monetizing themselves

their name and their likeness in this

case it was done via

debt I actually think when you look

today what's happening is a more

sophisticated version of that movement

but at much larger scale I mean we were

all joking that there was a bunch of

meme coins that launched not with any of

our support by the way but you know with

our names with all these other quasi

famous people's names those things went

up and were worth millions of dollars of

value and I think what this Donald J

Trump the djt company what it represents

is effectively a trading coin a baseball

card if you will a trading card via a

stock on the value of Donald Trump's

Enterprise Value his name his

recognition and his likeness so this I

think is the modern instantiation of the

Bowie Bond

and what's incredible is you can see

Bowie 30 or 40 years ago he could have

generated $55 million in inflation

adjusted dollars that's about a 100

million in today's dollars Trump three

and a half four billion I think it sits

on top of this idea that these very

famous people the Kim Kardashians of the

world the Donald Trumps of the world the

Mr Beasts of the world can eventually

take companies public and when you take

a company public you have to remember

Jason there's the revenue and the

profits right but if you look at the

balance sheet of a company there is

always a line item called Goodwill and

Goodwill is what people use to

separate the assets and the liabilities

and whatever is left over to generate

the shareholder Equity so in this case

Donald Trump the gjt company's balance

sheet will show a ginormous entry in

Goodwill and that is the value of his

name Coca-Cola has such a Goodwill line

item PepsiCo does gator does Nike does

and this company does and I think

there's going to be a lot of other

companies that will go public that

effectively generate a huge Goodwill

line item that represents the name brand

value of the person associated with it

so you're a buyer I'm not saying that

I'm just saying that there is a lot of

people that will be buyers that

essentially will buy this as a Donald

Trump a directional bent on the value of

his brand and I'm also predicting that

many other

individuals will go public can have

Enterprise values that are levered in

the same way as djt and that is a modern

version of the boy bond from

97 freeberg your thoughts on the chat's

argument that this is a proxy for the

value of Donald J Trump's brand I think

that's certainly one reason why people

are buying the stock and driving the

price up and another one is probably a

vote against traditional media that

there's a contingent of folks who are

basically voting with their dollars and

saying we want an

alternative to traditional media and

traditional publishing platforms that

have censorship that we don't agree with

or have editorialization that we don't

agree with and that this investment I

think represents a way for them to vote

and say I don't want the old way I want

a new way and while this may or may not

be the new way that succeeds it may or

may not be a great business and it may

or may not even have much viewership or

usefulness it's a mechanism by which

people can put some money down and say

I'm voting on an alternative I want to

see an alternative so I do think that

there's a flasho indication that arises

from this that's more than just the

meing aspect of it which is certainly

fun everyone crowds into a stock stock

price goes up it's kind of like to the

moon and so on I think there's also this

element of demand for alternative media

there's demand for a different type of

publishing

platform and so I think that what this

most represents to me from a what the

market is telling us

perspective I think there's one other

thing going on here which is that this

represents a populist reaction to the

lawfare against Donald Trump that I

think Trump's supporters want to support

him against all of these lawsuits and

this persecution that he's been facing

and I think one proof of this is if you

turn the dial over to MSNBC they've been

losing their minds all week over this

because they thought they had finally

gotten the man there was this $450

million judgment in New York that he was

fined for supposedly inflating the value

of of assets against which he got loans

even though the bank did its own

independent appraisal of the properties

and even though the banks fully got paid

back and said they wanted to keep doing

business with him so they thought they

had finally gotten djt and he was going

to have to pay hundreds of millions of

dollars in fines and then lo and behold

the spat comes along and he makes

millions and millions of dollars now

that's not locked in yet we're still in

this lockup period where for six months

there's a very small float and it's

probably the case that once there's more

shares on a liquid Market we'll find out

what the real valuation is so let's call

the valuation we're seeing today based

on a very small float let's call this

more of a preliminary number and Trump

can't sell yet but presumably after 6

months when the lock up comes off he'll

be able to sell so look I think

fundamentally what's going on here is

this is political Trump's enemies are

angry about this spack because they see

that it gives him a lifeline and I think

Trump's supporters are deliberately

buying this stock to support their guy

and to say that this law fair against

Trump that basically seeks to imprison

the man or bankrupt the man instead of

Simply run against him is a new low in

American political discourse and I think

there's millions of people who agree

with that and some of them are willing

to buy this stock as a as a protest vote

I agree 100% with the protest vote it's

uh you know he had what 60 70 million

people vote for him he got 74% 74

million rather

46.8% to bid's 81 million if but 2% of

those people want to buy the stock it's

a million and a half people and that's

exactly what's happening here they don't

care if they lose the money actual value

of this company with five million in

Revenue four million in yearly Revenue

I mean if you really want it to be

absolutely insane and give it 100x

valuation it's worth 400

million and so then if whatever Goodwill

Donald

Trump's likeness is maybe that's another

500 million but you'll lose a large

amount of money I predict if you buy

this and if you're buying it as a

protest vote sure go for it why don't

you uh jcal why don't you short it as a

j never shorted a stock and I I I think

remember gay

plin no who's this oh remember from uh

Melvin Capital he thought he could he

blew up his fund shorting GameStop he

thought he could outsmart all the Apes

yeah I mean that's exactly why I

wouldn't do it I've never shorted I

think that you know you get these Trump

voters and it starts going up because of

the small float which is what's

happening now they might send this thing

to 80 billion you know who knows what is

possible with the short float and a mo

motivated you know million two million

people you guys are bringing up

something else as well which is we've

shifted from fundamental-based stock

trading being the overwhelming driver to

there's a lot of like very speculative

day overday activity that you can't

control anymore and I think it's part

and parcel of what's happening in other

markets in America as well so when you

look at sort of like what happened in

2016 where the Supreme Court said each

state can

regulate Sports

gambling all forms of like online

gamesmanship and betting just started to

Sky maret it could be casinos lotteries

sports betting it didn't matter but

everything just caught a massive

ginormous bid and when you look at the

products that service the retail Market

they've also become increasingly

gamified Robin Hood is probably the best

example of of having built an incredibly

good business by making things more like

a game and then recently adding fuel to

the fire are things like zero day

options which are just like and there

was a big article in the Wall Street

Journal where like one of the reports

she became addicted to it and like the

Wall Street Journal gave her I want to

say like like a few thousand bucks but

she had to Discord the profits and she

like 2,000 ex she had she got like a

2,000% return or

something specking zero day options via

Robin Hood so the point is that on top

of the

whole movement to sort of allow

individuals to monetize their own name

and likeness via the stock market which

we just talked about the second movement

is that a lot of these things are

becoming less financialized and more

gamified and so you just have many more

participants and so to your point you

can have a GameStop moment in any of

these things you can have these zero day

options run the stock to the

Moon I would be I would tread very

lightly

here yeah and just another warning you

know the the stock market bases things

ultimately on like earnings and profits

and so when we look at this as a proxy

and Mr Beast would have the same issue

or Marthur Stewart you have a keyman key

individual risk here I.E this person

goes to jail they die whatever which

Martha Stewart always had on her

businesses and then what is included in

this is key so when if he does another

TV show and it becomes a hit again is

that included in this no if he has

another building or his buildings

included in this no if the golf course

is included no what's including in this

incl Ed in this deal when you buy djt is

apparently just a

really

crazy you know social network that

nobody uses so just be clear what you're

buying no you're right the the more

sophisticated version of this Trading

Card analogy would be if Donald Trump

contributed his brand licensing Revenue

in perpetuity to the asset and then it

really is a longitudinal forward bet on

on the Trump name yeah and that that's

sort of more like if virgin like if

Richard Branson took the Virgin hold Co

public yes that's effectively what that

is as well like you know Branson over 40

or 50 years has built an incredible

business I think the stat that I heard

when I got to know him was he's

created 20 businesses worth at least a

billion dollars or more over his life

with the Virgin brand with the Virgin

brand and the Virgin brand is a

licensing model where he holds that

right and he will license it to you for

a share of the revenue that's

independent of anything else that he may

do with these businesses and so if he

took that virgin hold co- public then

what you're buying is a longitudinal

discount of cash flow on the value of

Virgin and to your point if

Trump contributed that name and likeness

licensing capability into this by the

way he could also still do that so to

the extent that this business saw a

contraction and maybe the truth social

thing didn't end up being that valuable

but the other aspects of the media

business he could create by basically

saying okay look this will get a share

of my licensing revenue for my name

would effectively be a proxy to do that

so he's got a lot of outs here to

maintain this market value and then on

top of that to your point there's 70

million odd people who would want to

support him in one way shape or form I

would not go anywhere near shorting it

given his uh his fan base is incredibly

likely to keep buying these shares and

if you want to know the actual value of

this business today I'm an expert at

this it's a100 million it's $200 million

it's not anywhere close to this put your

money where your mouth this we just no

no we just explained when you have a

small float like this and a rabid group

of people who are gambling you will get

your face ripped off absolutely

stupidness what's that you'll get

pinned yeah I mean it's it's disastrous

I mean they what did they say we can be

stupid longer we can be longer

than you can be solvent

the is such a great

line I mean but you can gamble like this

on stocks yet you cannot invest in

private companies I don't get the legal

system in America be careful out there

folks you will lose a large portion of

money is my prediction if you buy the

stock but feel free if you want to

gamble look I think I think this is all

part of the ongoing backlash to lawfare

yeah Joe Biden instructed his justice

department to prosecute Trump it's in my

view it's utterly impressive in American

history for one president to try and

prosecute imprison and bankrupt his main

opponent in the political election and

there are millions of Americans who are

absolutely disgusted by this I think

it's a new low in American politics and

God bless all the people buying these

shares to support Trump this as a

protest vote I don't know whether

they're going to make money or lose

money like I said I don't think you can

justify the valuation based on

fundamentals but you can sure as hell

justify it based on

Payback yeah I mean if you want to give

your money to a billionaire buy the

stock

absolutely feel free I think Pro I agree

with you like maybe two of the six

lawsuits are a bit weak I think the

three or four other ones you know he

committed the crimes and he's just

paying the price but you know we can

agree to disagree on this pod