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Opinion: Trump Media’s billion-dollar valuation makes no sense

Opinion by Jill Filipovic

(CNN) — At Trump Media, it was the best of times, and it looks like it’s headed for the worst of times. Like so many things about former President Donald Trump’s businesses and entire persona, Trump Media has a splashy façade, has been propped up by a series of gullible fans and dedicated sycophants and, it turns out, doesn’t have much of substance to offer.

Last week, Trump Media was valued at nearly $11 billion, an astronomical sum for a money-losing company with a few million in revenue. Experts looking at the numbers say that they simply don’t make sense.

With the company’s financials now in clearer focus, it’s even more obvious that this is a house of cards. In the first nine months of last year, the company lost $49 million. It only generated $3.4 million — roughly the annual revenue of a Krispy Kreme franchise. Truth Social, Trump Media’s answer to Twitter/X, has fewer than 500,000 monthly active US users, compared to X’s 75 million. Even smaller, new social media platforms boast many times the user base of Truth Social. Threads, for example, says it has more than 130 million.

The market seems to be slightly correcting for reality. By Monday afternoon, Trump Media’s valuation had fallen to 8.8 billion. But the company, experts say, remains wildly over-valued. And that’s largely because Trump’s conservative fans are buying stocks because they like the man and believe his claims, not because the company is any sort of objectively good buy (there is “no way to square the current stock price with anything that would be called a rational valuation for this company,” NYU Law professor Michael Ohlrogge told CNN).

The company could remain drastically overvalued, though, for as long as Trump’s enthusiastic fans hang on. And the election doesn’t hurt, as Trump PACs will likely look at least in part at Truth Social for ad spends.

The Trump Media story, though, is a fascinating one because it is an amplified example of so much of the Trump playbook. Trump sold himself to the American public as a rich and successful businessman, a guy who was self-made and could solve America’s problems the same way he ruthlessly cut would-be employees on “The Apprentice.”

Very little of that story was true, of course. Trump was a child of affluence. His business empire sprung from his father’s largesse. He has lied about his wealth, both to boost his own ego and, according to a case he just lost, to defraud investors.

These lies are simply part of Trump’s modus operandi: In his four years as president, the Washington Post found he lied a staggering 30,573 times (and those are just the lies he told in public).

And yet even after such a long history of dishonesty and a failed reelection campaign in 2020 (the outcome of which he still lies about), he’s again the Republican Party’s pick for the presidency.

I am not the first to observe that Trump’s MAGA movement, and his followers’ unyielding support for Trump and only Trump, feels like a cult. Trump, the leader, shapes his followers’ understanding of reality: As of this past summer, nearly 70% of Republicans, for example, still believed Trump’s demonstrably false claim that the 2020 election was stolen.

Trump can be found liable for sexual abuse and fraud, and strong GOP candidates can run against him, and that still doesn’t make a critical mass of Republicans abandon him. One hallmark of a cult is that even when the leader is obviously wrong — if he, for example, predicts the wrong day for the end of the world — it doesn’t matter to the most stalwart of followers; there’s always an excuse, always an outside threat to bulwark against, always a new reason to hang on and stay together.

And the leader is always right, even if he changes his mind. According to cult expert Rick Ross and the psychiatrist Robert Jay Lifton, destructive cults typically have “a living leader, who has no meaningful accountability and becomes the single most defining element of the group and its source of power and authority.”

In 2020, the Republican Party simply declined to publish a new platform. Instead, they pledged fealty to Trump, adopting a resolution that “the Republican Party has and will continue to enthusiastically support the President’s America-first agenda.”

In other words, whatever Trump says is the party’s policy. That is not the typical behavior of a political party organized around ideals or policy goals; that’s the behavior of a cult.

Cults also often financially exploit their followers, encouraging them to give their money to the leader or the institution, even if doing so offers no tangible benefit to those doing the giving (it offers many benefits to the leaders receiving it). The point is to prove loyalty to the leader.

Trump has done this in many iterations, through sketchy recurring donations, by taking hold of the RNC and its money and through Trump Media, where some conservative fans seem to be buying up stock out of devotion to Trump and not because of any financial self-interest.

Donations are, of course, standard in political campaigns. A single candidate taking over the party apparatus, installing unqualified lackeys (in this case his daughter-in-law) and directing donations to the group paying his legal bills is not. And people buy particular stocks for all sorts of reasons, but usually the motivation is to make money.

In this case, many who buy shares in Trump Media seem instead to want to please the former president — or at the very least continue to believe his claims, despite decades of lies. Even legal consequences haven’t shaken many MAGA members’ confidence in their man.

“The first rule of cults is: you’re never in a cult,” cult expert Daniella Mestyanek Young told Jennifer Rubin of the Washington Post. “The second rule of cults is: the cult will forgive any sin, except the sin of leaving. The third rule of cults is: even if he did it, that doesn’t mean he’s guilty.”

And the fourth might be: Give me your money. That’s a ruse Trump has excelled at. And for now, at least, it’s partially paying off. But like the rest of his lies, confidence can only go so far. His most dedicated followers may never wise up and realize he’s a con man. But at some point, the con will be up. The question is who will be left holding the bag: Trump or all of those who eagerly handed over their cash.

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