Now that Donald J. Trump has won the presidential election, one thing is clear: The social media company that bears his name and represents the bulk of his personal fortune is not going away anytime soon.
The market valuation of Trump Media & Technology Group, the parent company of the platform Truth Social, currently rivals toy company Mattel. And Mr. Trump’s majority stake in Trump Media is worth about $3.3 billion.
The company’s shares have bounced around since Election Day, but the stock, at about $29, is up more than 140 percent since its low on Sept. 23, when it closed at $12.15 Individual investors account for the overwhelming majority of the company’s 650,000 shareholders, according to Trump Media.
But the company remains very much at a crossroads given Truth Social’s paltry revenues and limited advertising base. And though Mr. Trump has no official role at Trump Media, his 57 percent ownership stake raises the potential for conflicts of interest.
A potential conflict of interest could arise if a foreign government or wealthy person bought a lot of Trump Media shares to prop-up the stock and potentially gain influence with Mr. Trump, said Kathleen Clark, a government ethics expert at Washington University School of Law in St. Louis.
Another potential conflict has to do with Trump Media’s seven-member board, which is filled with the president-elect’s loyalists, including some who are reportedly being considered for posts in the new administration.
In a statement, Shannon Devine, a Trump Media spokeswoman, said the company had created “an uncancellable, free-speech ecosystem comprising a social media platform and an ultrafast TV streaming service” all within eight months of going public.
Here are some of the biggest questions facing Trump Media and its investors as Mr. Trump begins filling out his new administration.
What will Mr. Trump do with his shares?
In a Nov. 8 post on Truth Social, the president-elect said he had no intention of selling his shares and he accused bearish investors of spreading rumors to the contrary as a way to drive down the stock price. Mr. Trump similarly pledged to hold onto his shares in mid-September, when a contractual provision that had barred him from selling stock for six months expired.
As long as shares of Trump Media don’t fall in value, Mr. Trump may have little incentive to sell given that Truth Social is his preferred online megaphone for communicating to his supporters, making policy statements and blasting his political opponents.
But other corporate insiders are likely to try to monetize some of their holdings while the stock is high. On Tuesday, two Trump Media executives and one board member disclosed that they collectively sold hundreds of thousands of shares on Nov. 8.
Do government ethics rules require Mr. Trump to sell stock?
In short, no.
Although federal financial disclosure laws require most top White House officials to sell shares or other investments to avoid potential conflicts of interest, those rules do not apply to presidents, Ms. Clark said. That makes it unlikely that Mr. Trump would need to sell any of his 115 million shares when he takes over the presidency.
Can Truth Social expand beyond its Trump-focused user base?
In terms of reach, Mr. Trump’s social media platform lags well behind X, the site formerly known as Twitter that is owned by Elon Musk. In October, Truth Social had 650,000 monthly active users in the United States, compared with 70.4 million for X, according to Similarweb, a data tracking site.
Truth Social’s focus is also more narrow than X’s. Similarweb found that about a third of the traffic or engagement on Truth Social is with Mr. Trump’s personal postings from his account.
By contrast, engagement with Mr. Musk, the tech billionaire who has become one of Mr. Trump’s closest advisers, accounts for about 1.4 percent of the traffic on X, according to Similarweb.
Shannon McGregor, a professor of journalism and media at the University of North Carolina, said the traffic numbers generated by Mr. Trump’s account reflected the limits of Truth Social.
Can Truth Social generate sufficient advertising dollars?
So far, Truth Social, which has been the only source of revenue for Trump Media, has not been a big moneymaker. For the first nine months of this year, the social media platform took in $2.6 million in advertising dollars, a 23 percent decline from a year earlier. A vast majority of that advertising is for merchandise and services that cater to Mr. Trump’s supporters.
In regulatory filings, Trump Media has repeatedly described its advertising strategy as a “nascent” initiative. But the company has not offered any guidance or details on its ad strategy.
What is the one bright spot for Trump Media?
Though Trump Media lost $19.2 million in the third quarter, the company has roughly $673 million in cash and short-term investments on its balance sheet. In news releases, it has said that it is well positioned to make acquisitions but has not publicly discussed any deals it might be considering.
Is Trump Media’s board a launchpad for the Trump administration?
Three members of the company’s board — Kash Patel, Robert Lighthizer and Linda McMahon — have been the subject of speculation for people being considered for jobs or advisory roles in the new administration. Ms. McMahon is a member of Mr. Trump’s transition team. If any of them are tapped for the positions, Trump Media would most likelyhave to replace them.
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