Truth Social Investing: Understanding the Market and Making a Profit

Truth Social investing can be a lucrative opportunity for those who understand the market. In the US, Truth Social has gained significant traction, with over 1.5 million users in its first week of launch.

To make a profit, it's essential to grasp the fundamentals of the platform. Truth Social is a social media app that allows users to share their thoughts and opinions, similar to other popular platforms like Twitter and Facebook.

Investors can benefit from the app's growing user base and engagement. As the platform expands, it's likely to attract more advertisers and sponsors, increasing revenue opportunities.

Understanding the market and user behavior is crucial for successful investing.

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Truth Social's investing model is built on the principles of diversification, with a focus on a mix of stocks, bonds, and alternative investments. This approach allows investors to spread risk and potentially increase returns.

By allocating 40% of their portfolio to stocks, investors can tap into the growth potential of the market, as seen in the article's example of a 20% return on a $10,000 investment in a single stock.

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The Buy and Hold strategy is a straightforward approach to investing in Truth Social, but it's not without its concerns. You're worried about the company's lofty valuation.

One of the main concerns is that Trump's political views could scare advertisers away from the platform. This could negatively impact the company's growth prospects.

You're also concerned that a Trump election loss could hurt Truth Social's valuation and growth prospects. This is a significant risk to consider.

Another concern is that Trump's conviction could have a negative impact on Truth Social's growth. This is a real possibility that you should be aware of.

Additionally, there's a risk of another assassination attempt against Trump in the future. This could have a devastating impact on the company.

Here are some of the key concerns to consider when investing in Truth Social using a Buy and Hold strategy:

You should carefully weigh these concerns before investing in Truth Social using a Buy and Hold strategy.

To place an order, you'll need to go to your brokerage account's order page.

Fill out all the relevant information, including the number of shares you want to buy or the amount you want to invest to purchase fractional shares. This will ensure you get the exact amount of stock you're looking for.

The stock ticker is also important to note - in this case, it's DJT for Trump Media and Technology Group.

You'll also need to decide whether to place a limit order or a market order. A market order guarantees you buy shares immediately at market price, which is recommended by The Motley Fool.

Here are the key details to include on your order page:

Some people invest in the stock market purely for the money, without any emotional attachment to the company or its cause.

Mitchell Standley, a 39-year-old from Arizona, is a great example of this. He bought shares in Digital World Acquisition, a public shell company that merged with Trump Media, to make a profit.

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He timed his bet right, turning a $750 investment into $4,500 in just four hours. Standley used a more advanced investing tactic, purchasing two "call options" that allowed him to sell off the stock for a profit.

DJT's Truth Social media stock price saw a rapid rise, making it a tempting investment opportunity for some. Standley was one of them, and he made over $3,000 in profit by selling off his call options.

Standley claims to have no political motivations for investing in Trump's social media company, but he acknowledges the strong following of the former president's fans. He sees this as a "no-brainer" investment opportunity.

In fact, online forums like Reddit are filled with people like Standley, who are looking to make a quick profit from their investments, without any long-term commitment to the company.

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As of late 2024, 36 ETFs held 2.5 million shares of Trump Media stock.

The biggest holder was Schwab U.S. Small-Cap ETF, which held 329,390 shares.

However, Schwab U.S. Small-Cap ETF has a tiny allocation to Trump Media stock at 0.06%.

Global X Social Media ETF had a higher allocation to Trump Media stock at 0.6%.

ETFs likely aren't the best way to gain passive exposure to Trump's Truth Social platform due to relatively low allocations.

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Truth Social's financial performance is a crucial aspect to consider before investing in the company. As of late 2024, the company wasn't profitable yet.

Its focus was on long-term product development rather than generating revenue, resulting in only $837,000 in revenue during the second quarter of 2024, mostly from advertising. The company also recorded $2.3 million of interest income from its cash balance.

Truth Social posted an operating loss of $16.4 million based on generally accepted accounting principles (GAAP), with about half of that loss related to its merger with Digital World Acquisition.

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As of late 2024, TMTG wasn't profitable yet.

The company's focus was on long-term product development rather than generating revenue, which resulted in only $837,000 in revenue during the second quarter of 2024, mostly from advertising.

TMTG recorded an operating loss of $16.4 million based on generally accepted accounting principles (GAAP), with about half of that loss related to its merger with Digital World Acquisition.

The merger with Digital World infused the company with cash, leaving it with $344 million at the end of the second quarter.

Despite its limited revenue and large losses, the company expects to have enough capital to continue operating for the foreseeable future.

The company will eventually need to generate significant revenue and profits to fund its operations and justify its lofty post-IPO valuation.

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Truth Social's stock price soared despite the company's financial struggles, including a $49 million loss last year. This may seem counterintuitive, but it's not the first time a company's stock has performed well despite financial difficulties.

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The company's recent merger with Digital World Acquisition infused it with $344 million in cash, giving it the funds to operate and invest in building products. This influx of capital will likely continue to support the company's growth.

However, Truth Social still needs to generate significant revenue and profits to justify its lofty post-IPO valuation. If it doesn't, shares could lose much of their value.

As of late 2024, the company was not yet profitable, with an operating loss of $16.4 million based on GAAP.

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Truth Social's financials don't exactly match its stock success. The company reported a $49 million loss last year.

Investors might be swayed by the platform's association with Donald Trump, but it's essential to look beyond the hype. Truth Social has fewer users than any other social network that has gone public.

Consider this before investing in Truth Social: the company's financials don't align with its stock price.

Truth Social's owner didn't pay a dividend as of late 2024, and it's unlikely they'll start paying dividends anytime soon.

The company was still in the early stages of generating revenue and wasn't yet profitable, which is a major concern for investors.

Truth Social lost $49 million last year, which is a significant amount of money for a company that's supposed to be generating revenue.

Investors should be aware that the company expects to incur operating losses for the foreseeable future, which is a major red flag.

As of 2023, Truth Social had just $3.4 million in total revenue for the first nine months, which is a very small amount of money.

The company's profitability problems are so severe that it's not clear if they can continue as a going concern, which is a major concern for investors.

Given the controversy surrounding Trump, the platform might not be the best investment option for many people, and its high valuation compared to its user base and revenue is another major concern.

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When considering an investment, it's essential to weigh the pros and cons. In the case of Truth Social, here are some factors to consider:

You're a big fan of Trump, which might make you more inclined to invest in Truth Social. You believe in the platform's potential for growth, especially if Trump is elected again.

Investing in IPO stocks can be volatile, so it's crucial to understand the risks. Trump's conviction and the attempt on his life might boost his re-election prospects and, in turn, Truth Social's growth.

If you're an active user of Truth Social and prefer it to other social media platforms, this could be a good sign for the company's future. However, be cautious of the platform's valuation and whether it can live up to its lofty post-IPO value.

Here are some key points to consider:

Ultimately, the decision to invest in Truth Social depends on your individual circumstances and risk tolerance. Take your time to research and consider your options carefully.

Investors who jump into Truth Social's stock are essentially riding waves of sentiment, not traditional metrics. This volatility can be a double-edged sword.

The stock's performance so far has been unpredictable, with one major dip from $72 to under $58 in just one hour. This kind of volatility can be unsettling for investors.

Investors like Standley, who saw his net worth soar after Trump Media's public launch, may benefit from this trend. The former president's net worth even rose to $4.5 billion on paper, thanks to his 60% stake in the company.

However, this kind of volatility also comes with a risk of losing money. As Rodriques of the University of Georgia pointed out, investors may end up losing money by pumping funds into a stock that's rising due to other investors' behavior, rather than the company's performance.

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Andy Litinsky and Wes Moss, two cofounders of Truth Social, have sold over 7.5 million shares of the company.

The sale was worth more than $100 million based on the company's current stock price.

The shares were sold by United Atlantic Ventures, an investment company created by Litinsky and Moss.

This marks the first insider transaction since the company's lockup provision expired last week.

Litinsky and Moss were key players in the creation of Trump Media, the parent company of Truth Social.

The company has been embroiled in legal battles with Litinsky and Moss over the last year.

A Delaware judge ruled in favor of United Atlantic Ventures in September, clearing the way for the sale.

Investors have shown little reaction to the news of the 7.5 million shares being sold.

Trump himself has stuck to his promise not to sell his shares.

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Truth Social's stock price was less than $30 a share in late 2024, making it an accessible investment option for most people.

As of late 2024, Truth Social's parent company TMTG didn't have an upcoming stock split on the calendar.

The company had only recently gone public via a merger with a SPAC, which might explain why a stock split wasn't necessary at the time.

This accessible stock price likely means Truth Social won't need to split its stock anytime soon.

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