POV: Why the biggest loser of the election may be the Truth Social brand

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The Democratic National Convention dominated the political news this week. But judging by share price, at least, the most notable election-related brand story of recent days is on the other side of the aisle: Trump Media, parent of Truth Social, the Trump-centric social-media platform, has been taking quite a beating, with its stock now touching all-time lows even as the broader market bounced back from a recent dip.

DJT shares have functioned more as a gauge of sentiment toward the Truth Social brand—or more properly, the Trump brand—than a measure of the actual business: The company’s market cap (more than $4 billion even as the share price droops) is completely divorced from fundamentals (most recently, second-quarter revenue of just $836,000, a 30% decline from a year ago, and a loss of more than $16 million). That sentiment could, of course, rebound; a big chunk of DJT owners seem to be opportunistic meme-stock traders or simply Trump fans who believe in whatever his brand touches. (Some investors may also see DJT shares as a way to funnel money to Trump.) But a rapid series of events lately, both election- and brand-related, have made Truth Social look like the biggest brand loser of the campaign to date.

This round of trouble started with those most recent quarterly earnings numbers, which suggested that instead of gaining popularity during a period when the Trump campaign was soaring, Truth Social was treading water at best. It was founded, essentially, as an alternative to Twitter and other mainstream platforms back when Trump was widely banned after the January 6 storming of the Capitol. In a best-case scenario, it should be the Fox News of social media. But instead, its purpose has become steadily less clear since Elon Musk acquired Twitter, rebranded it as X, and reinstated a slew of banned users, including the former president.

Then came Trump’s conversation with Musk via the platform’s Spaces feature. To mark the occasion, Trump posted to his X account, sparking more attention than practically anything he’d posted on Truth Social. This was effective in helping attract lots of attention to the Spaces stunt, which was itself more of a branding event for X than an actual interview. Many assumed this meant Trump was going to re-prioritize his old account.

That fear apparently landed a blow to Truth Social’s prospects, with DJT shares dropping 5% in one trading session, closing at a little under $25. (The stock was over $50 a share as recently as May.) This week, as attention coalesced around the DNC, Trump’s campaign was pushing attack ads along with a sponsored #ComradeKamala hashtag on X. DJT sank below $22, flirting with all-time lows—and down 15% during a stretch when the S&P was up about 8%.

While DJT shares rebounded slightly midweek, in a month when the election is center stage and should have boosted Truth Social’s relevance, the opposite has happened. There’s certainly plenty of online campaign discourse (or at least memes), which has done more for TikTok’s already considerable cultural status than anything for Truth Social. Or X, for that matter. Trump has kept up a steady stream of incendiary Truth posts and outrageous AI-generated fakery, it just seems to have little impact on the broader conversation.

With the DNC concluded, it’s hard to predict where election attention may surge next. Curiously, even Truth Social did not offer a vision of its near-term future, or a case for its potential when it announced those recently quarterly numbers, opting against an earnings call that might have spun some kind of forward-looking story for the platform.

For now, at least, the only Truth future to fixate on is the expiration of some shareholder lockups that may trigger a round of sales next month. Trump owns 60% of DJT shares worth more than $2.6 billion, and investors are particularly focused on whether and when he might begin to cash out, likely tanking the stock further. “The key support of Trump Media’s still-high stock price is the Donald Trump brand,” one investor argued in a Forbes column. “Without the Donald Trump brand, a fundamental evaluation would produce a low, single-digit price.” The company itself has acknowledged in public filings that its “brand may diminish if the popularity of President Trump were to suffer.”

That is not to say that Trump’s fate and Truth Social’s are interchangeable. The actual election remains close, and his candidacy has plenty of time to rebound. Trump doesn’t depend on Truth Social, but Truth Social does depend on him. And that is precisely its problem.