A less contentious outcome of the public spat between Elon Musk and President Trump might be Musk potentially acquiring Trump’s social media platform. While there seems to be a possibility of reconciliation between them, Musk might just be eyeing an opportunity to throw a lifeline to Trump’s struggling venture.
To break it down, there’s chatter among traders about Musk’s interest in purchasing Trump’s media platform as the 2024 election cycle heats up. The argument goes like this: Trump’s True Social is desperate for a buyer. The parent company, Trump Media and Technology Group, reported a staggering loss of $400 million last year, with revenues barely reaching $3.6 million. On a good day, they pull in around 2 million users—far less compared to the 36 million active on X.
Trump Media currently trades around $20 per share, giving it a market cap of $5.7 billion, while Musk’s wealth sits at a whopping $414 billion, as estimated by Forbes. What better way to cozy up to the powerful businessman-turned-president than by giving him a financial boost?
Historically, this back-and-forth has been filled with drama. Trump’s media platform flopped from the get-go, with Musk’s Tesla relying on state support for some revenue. Unlike Tesla, True Social hasn’t bounced back and remains in the red. There’s some speculative discussion in market circles, though it seems like Musk is not looking to buy Trump Media immediately after this latest round of conflict.
Short selling appears on the rise for True Social, indicating traders anticipate a stock drop. About 12% of its available shares are currently shorted, according to Bob Sloan of S3 Partners, who is knowledgeable in this specific market area. It’s worth noting that Sloan is my co-host on a podcast about risk and reward.
Traders speculate numbers would improve without the overhanging idea that Musk might swoop in to acquire Trump’s platform, of course, as Trump has expressed a willingness to mend fences.
On another note, it’s important to consider that even though Trump’s platform isn’t doing great, it has some unique advantages like Trump’s name recognition and the buzz generated by his posts. The company is also introducing new features and boosting its streaming services, positioning itself as an early-stage business with potential—even if the statistics suggest otherwise.
If Musk genuinely wants to smooth things over, acquiring the platform certainly seems like it could serve as a bargaining chip.
