An Event Study: News and Trump Media and Technology Group, 4/1/2024

The efficient markets hypothesis indicates that new information should induce a revision to the present discounted value of future dividends, and hence a change in the market value. Apparently news came today.

Source: Investing.com, 1:50 CT, 4/1/2024.

Of course, the efficient markets hypothesis would’ve also suggested that the price of this stock was way out of proportion to fundamentals (as perceived by rational agents). However, fads (as defined by Summers) can be very long-lasting, and difficult to detect using the standard random walk criterion.

Addendum:

Since the consolidated group only started trading last Tuesday, maybe better to show what’s happened over the past week.

Source: Investing.com, 2:15 CT, 4/1/2024.

31 thoughts on “An Event Study: News and Trump Media and Technology Group, 4/1/2024

  1. baffling

    my opinion was to short this stock, if you could find somebody on the other side of the trade. but i did not take any action. probably would have been the easiest trade of my life. if twitter could not be monetized, now way this company can be profitable. pure meme trade here.

    Reply
    1. Macroduck

      I imagine there are two groups who will hold this stock. One is the bunch of rich Trump-buddies who created the shell company. They have collectively arranged, through the shell, for Trump’s paper wealth to increase by billions.

      The other is MAGA Hatters. My guess is that MAGA Hatters aren’t going to be building an ever-increasing position in the shell game. They are expressing allegiance to MAGA Man by holding one share, maybe five shares. They won’t effect the market once they’re all in.

      The shell game is, then, just about all that matters to the market price of the shell over time. In a thinly-traded stock, inflating the price is easy. Swap shares back and forth, adding a little to the price every day. That helps Trump to the extent that he uses his shares as collateral for loans and other such surety arrangements. That could actually be quite useful.

      However, in order for Trump to sell his shares, the Trump-buddies need to give him actual money, because they are the only market for this worthless pile of electrons. If Trump is going to realize billions from this deal, the Trump-buddies have to surrender billions. It’s completely zero sum.

      Reply
      1. baffling

        I can see trump running afoul of sec rules on stock manipulation in the future. his buddies involved in this shell game will also be targets. his getting into office eliminates such a concern for him, but not necessarily his buddies. trump has many reasons to get reelected, most of them relate to avoiding jail time and fines. few are related to a desire for good governance.

        Reply
        1. Macroduck

          Yeah, this had crossed my mind, too. Pump and dump is illegal, so if this is an attempt to offload over-priced shares on MAGA Hatters, it’s a crime.

          Reply
          1. baffling

            not that I mind maga hatters losing their money, even if it goes to trump. wasted money either way.

    2. Willie

      I looked into shorting it. Buying a put costs almost as much as a share. So, obviously the market thinks that by January 2025, it will be valueless.

      Reply
      1. Ivan

        “revenues of $5 million”
        Sounds like Trump Steaks”, “Trump Wine” and “Trump University” to me.

        Reply
  2. Not Trampis

    I am unsure how you value this stock? The PEs are simply insane and now the auditor is questioning its future.
    Trump cannot sell the stock as it might tank and surely even MAGA types do not like losing money. neither could he take out a loan on their basis because of the shares ‘shaky’ viability.

    would n’t it be ironic if the shares tank just before the election

    Reply
    1. Moses Herzog

      @ Not Trampis
      Now, this is actually where you’d have a justified complaint about American math and American “intelligence”. I hereby give you permission to take an axe to American culture on this one.

      Reply
  3. pgl

    I missed this story:

    Truth Social lost over $58 million in 2023, on revenue of only $4.1 million, according to new SEC filings.

    OK I’m a little slow but at least I answered by own question. Then again low revenues and high losses have been the norm for this clown show.

    Reply
  4. pgl

    I ventured over to the Company View at http://www.sec.gov

    Their description of their “business” is the kind of self serving hoot one would expect from MAGA hat morons. The list of people running this joke is your usual program of the clown show. So I skipped to what we was a weird looking income statement. I had to check – what kind of jokers are their financial auditors:

    Adeptus Partners, LLC

    Ever heard of these guys. They must make Mazars look good by comparison.

    I’m telling you – short sell this sinking ship now.

    Reply
  5. Ivan

    Natural gas prices are at a multiyear low

    https://oilprice.com/Energy/Gas-Prices/Natural-Gas-Producers-Are-Ready-To-Pounce-When-Prices-Rebound.html

    US producers are keeping it in the ground at this time because it can’t give them a profit. Russia still has a good amount of income from NG so this must be hurting them also.

    https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm

    What some may not understand is that Biden was actually helping the people investing in natural gas export infrastructure by the pause. We are already set to double US natural gas export by 2027. Not great if the market is already chocking.

    Reply
    1. pgl

      ‘Survey participants expect a Henry Hub natural gas price of $2.59 per million British thermal units (MMBtu) at year-end, compared to an average price of $1.44 per MMBtu through most of March when the survey responses were collected. Executives see Henry Hub prices at $3.18 per MMBtu two years from now, and at $3.94 per MMBtu five years from now.’

      The story notes that $1.44 per MMBtu is below production costs. Of course, one has to ask – what are production costs?

      Reply
  6. pgl

    Catch this statement (ala the Washington Post story):

    ‘The company has declined to share performance indicators like those common across the tech industry, such as its number of active users, and said it may continue to withhold such figures. Focusing on those numbers, the company said, “might not align with the best interests” of Trump Media or its shareholders.’

    In other words, Trump does not want shareholders know how many people use Truth Social. The SEC should fine this clown show for deliberately conning the shareholders.

    Reply
  7. pgl

    Bad news for chocolate lovers:

    https://tradingeconomics.com/commodity/cocoa

    Cocoa futures climbed further to reach a new record level of nearly $9,900 per tonne, reflecting the sustained pessimism surrounding the supply outlook. Cocoa prices have soared by more than 100% since the beginning of the year, driven by the severe cocoa shortage in West Africa, in particular Ghana and Ivory Coast, where more than half of the world’s cocoa beans are harvested. Ghana’s Cocoa Board (Cocobod) said that Ghana’s 2023/24 cocoa harvest will be only 422,500 MMT to 425,000 MT, half the country’s initial forecast and a 22-year low, as extreme weather and disease decimated the cocoa crop. In the meantime, farmers noted that the lack of rain and strong sun in most of Ivory Coast’s main cocoa regions last week could hinder the April-to-September mid-crop. The International Cocoa Organization (ICCO) projected that the global 2023/24 cocoa deficit would widen to 374,000 MT from 74,000 MT in 2022/23, as the global cocoa production in 2023/24 will likely fall by 11% y/y to 4.45 MMT.

    Reply
  8. James

    DJT stock is a money laundering scheme for unknown actors to get around campaign finance law and funnel money to Trump. It is also another grift of the Trump cult. Sure – go ahead and invest in DJT which had a $58 million loss on $4 million in revenue and has Devin Nunes and other Trump sycophants running the company.

    Reply
    1. baffling

      and now trump is suing his co-founders, and looking to take away their stake in the company. not that you could not see such action coming from the greedy douche bag. you deserve whatever you get when you get into bed with trump. bankruptcy, vd, doesn’t matter. he spreads them all.

      Reply
  9. Steven Kopits

    TMTG CONSOLIDATED FINANCIAL STATEMENTS
    As of December 31, 2023 and December 31, 2022 and for the twelve months
    ending December 31, 2023 and December 31, 2022
    Page 1

    Substantial Doubt about the Company’s Ability to Continue as a Going Concern

    The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

    TMTG CEO Devin Nunes said, “We are excited to be operating as a public company and to have secured access to capital markets. Closing out the 2023 financials related to the merger, Truth Social today has no debt and over $200 million in the bank, opening numerous possibilities for expanding and enhancing our platform.

    https://finance.yahoo.com/news/trump-media-technology-group-files-220000453.html

    As Dec. 31, 2023, TMTG had $2.6 million cash on hand, $2.9 million in assets, $70 million in liabilities and -$67 million in equity. Nunes’ statements appear to be fraudulent.

    https://www.sec.gov/Archives/edgar/data/1849635/000114036124016719/ef20025342_ex99-2.htm

    Reply
    1. pgl

      Cash: $2,572.7 thousand as of 12/31/2023 … BUT $9,808.4 thousand as of 12/31/2022.

      Could it be the reduction of cash of over $7 million be payments to the Trump defense teams?

      Notice how few fixed assets owned v. how many were leased (right-to-use).

      Even the balance sheet is shady.

      Reply
    2. pgl

      ‘$70 million in liabilities’

      But wait – the income statement shows over $39 million in interest expenses. WTF? What kind of interest rates are the borrowers demanding?

      Reply
  10. Steven Kopits

    Properly formatted:

    TMTG CONSOLIDATED FINANCIAL STATEMENTS
    As of December 31, 2023 and December 31, 2022 and for the twelve months
    ending December 31, 2023 and December 31, 2022
    Page 1

    Substantial Doubt about the Company’s Ability to Continue as a Going Concern

    The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

    Meanwhile, here’s what CEO Devin Nunes said about the company:

    TMTG CEO Devin Nunes said, “We are excited to be operating as a public company and to have secured access to capital markets. Closing out the 2023 financials related to the merger, Truth Social today has no debt and over $200 million in the bank, opening numerous possibilities for expanding and enhancing our platform.

    https://finance.yahoo.com/news/trump-media-technology-group-files-220000453.html

    As Dec. 31, 2023, TMTG had $2.6 million cash on hand, $2.9 million in assets, $70 million in liabilities and -$67 million in equity. Nunes’ statements appear to be fraudulent.

    https://www.sec.gov/Archives/edgar/data/1849635/000114036124016719/ef20025342_ex99-2.htm

    Reply
    1. pgl

      Gee Stevie learns to read a 10K filing. Now does Stevie have a clue what these passages mean? I doubt it even if every with a brain knew Truth Social is a Ponzi scheme well before this pathetic excuse of an SEC filing came out.

      Reply

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