How Truth Social could make former President Trump billions before turning a profit

Truth Social is a social media platform whose majority owner is former President Donald Trump.

A team of early investors say they want to "end Big Tech's assault on free speech." Achieving that may require a rapid uptick in the size of its user base, which is currently unknown.

The public has limited access to Truth Social's usage data, which drives advertising sales, a key metric for success at Truth Social. When reached for comment, the company declined to disclose its usage data to CNBC.

Truth Social's parent company, Trump Media & Technology Group, is the product of a blank-check merger with a special purpose acquisition company, or SPAC, which was completed in March 2024. It currently trades under the stock ticker DJT.

The business formation strategy and a buzzy launch on public markets could financially benefit Trump in the lead-up to the 2024 election. As of July 2024, Trump held 114,750,000 shares of TMTG's Common Stock,about 65% of the company. He could sell some of his shares as early as September, potentially earning him billions before Election Day.

The former president is also entitled to up to 4,061,251 warrant options, each redeemable for one DJT share.

In July 2024, the stock traded at around $33 per share — north of the $10 share price offered to early backers of the project, when it was known as Digital World Acquisition Corporation. Investors have kept the company afloat as it's reported big losses against low revenues.

"The share price is explained more by the, you know, the meme stock phenomenon," said Michael Klausner, a professor of law and business at Stanford Law School. The term "meme stock" refers to businesses that suddenly gain popularity, particularly over social media, leading to high stock