The merger on Friday between Digital World Acquisition Corp. and the Trump Media & Technology Group, the parent company of Donald Trump's Truth Social, may have resulted in a temporary $3 billion windfall for the former president, but technology experts are more than skeptical that the merged company will survive in the long term.
According to a report from CNN, the social media platform is barely scraping by and is solely dependent on Trump posting on it to have any value as users abandon it in droves.
CNN is reporting, "Outside of his MAGA movement, though, the social media site is struggling to find a wider audience. It is hemorrhaging users, and its traffic has plummeted. There were roughly 860,000 accounts active on the site as of November – a tiny blip compared with more mainstream platforms."
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The report notes that after three years of existence, Truth Social lacks appeal to new users with the app "not among the 100 most downloaded social media applications in the Apple App store."
According to tech experts, that should be concerning to investors hoping to make a killing.
With CNN reporting, "Trump Media’s management warned last year that the company was at risk of insolvency without a merger, and most analysts are skeptical of its current valuation above $6 billion," Jay Ritter, a finance professor at the University of Florida indicated he was less than impressed.
"It’s grossly overvalued. It qualifies as a meme stock for which the price is divorced from fundamental value,” he explained.
As noted, the platform will live or die with Trump's fortunes and participation.
According to Josephine Lukito of the University of Texas at Austin, "Truth Social’s clout is driven very much if not entirely by Donald Trump’s popularity. Without him, I don’t think there’s a viable path forward for it.”
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