MyPillow CEO Mike Lindell has taken his social media company public. That might be a bad idea

The right-wing social media ecosystem is getting more crowded these days—and as those sites become more popular with some conservative voters, their founders are looking to cash in. But the long-term success of those investments is looking increasingly uncertain.

Mike Lindell is the latest to explore a public offering. In 2021, the MyPillow CEO launched FrankSpeech, which describes itself as a “pioneering force dedicated to freedom of speech and technology.” Lindell has said he owns the servers for the YouTube-like channel, to ensure that his content cannot be taken down. (He launched the site after he was removed from Twitter for spreading conspiracy theories about the 2020 election.)

Last week, FrankSpeech announced it was merging with the publicly-traded media holding company InCapta in a reverse stock split. That will make FrankSpeech a publicly traded entity on the OTC market, rather than the Nasdaq or New York Stock Exchange.

OTC securities are traded through broker-dealer networks, but aren’t as regulated as companies on larger exchanges. They tend to be less transparent and are often a much riskier investment, as they don’t have to meet minimum standards. They also generally have lower trade volumes, meaning it can be harder to sell the shares if an investor wants to get out. Most importantly, there’s dramatically less public information available about OTC companies, which makes them more vulnerable to fraud schemes.

So, while FrankSpeech might claim in its release announcing the merger, that it has 7.2 million monthly views and 150 million annual impressions, it’s tough to verify that number.

The stock, as of last week, was trading at just $2.45 per share (though it did jump 8% on news of the FrankSpeech merger).

Lindell enters the market at a perilous time for investors in right-wing social media outlets. Shares of Trump Media are down more than 57% in the past six months (and have fallen 33% in the past month). Trump shares, which now trade for $19.50, were once as high as $79.38.

They could fall even further as the lockup period for executives, including Donald Trump, is about to expire. Two investors have already declared plans to sell 18 million shares beginning Sept. 19, when they’re legally permitted to do so. The company has mounted a legal challenge to prevent that, but a judge denied the motion last week.

Meanwhile, shares of Rumble, another YouTube alternative that markets itself as being “immune to cancel culture” are down more than 20% in the past six months (and have lost 4.5% in the past month). Rumble, which trades for $5.75, has a 52-week high of $9.19.

Last week, Rumble’s founder and CEO fled Europe following France’s arrest of Telegram CEO Pavel Durov. He announced his departure not on his own platform, but on X (formerly Twitter).

There’s also Parler, the far-right social media app that was dropped by Apple and Google in 2021 after the Capitol riots. (Amazon, additionally, refused to continue hosting it on its Web Services division.) The company went through more upheaval around that same time, with the CEO being fired after clashes with the platform’s board of directors. In 2023, though, the site was purchased and shut down by its new owners for a retooling.

Parler is back up, but it’s hardly flourishing. A recent look at “Trending topics” saw new post counts in the single digits, even about things like “trump” and “kamalaharris.”

Even Elon Musk’s X, which isn’t specifically a right-wing social media site but has become increasingly popular with conservative users, is struggling. As of March 31, the holding has lost an estimated 71.5% of its value—and the underperformance of those loans is the worst the banking industry has seen since the real estate crisis of 2008. Musk himself has lost an estimated $17 billion or so.

This, of course, doesn’t guarantee that shareholders in Lindell’s FrankSpeech will lose their money. But when the company’s peers are underperforming to such a broad degree, it’s something that should give potential investors pause.