Redditors are buzzing about former President Donald Trump's social media platform, Truth Social, as it is set to become the second social media company to go public in less than a week.

What Happened: Digital World Acquisition Corp. ( DWAC ) announced Monday that it has completed its business combination with Trump Media & Technology Group Corp.

According to regulatory filings, Trump Media & Technology Group pulled in $3.3 million in revenue over the first nine months of 2023 and booked losses of $49 million during the same period. When it begins trading on the Nasdaq on Tuesday, TMTG could be valued as high as $8.6 billion on a fully diluted basis based on current prices. 

Retail Chimes In: Redditors are commenting on the staggering valuation of the parent company of Truth Social, an unprofitable social platform with approximately five million active users, according to estimates from SimilarWeb. 

"DWAC revenues are at a whopping 3.2 million. Yes, a grand total 3.2 million in revenues and the company is valued at around 9 billion," u/RainGator said.

"Valuations are for old people," replied u/TheSavageBeast83.  

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Another user expressed a similar opinion, but also offered an opposing bull case.

"Obviously TMTG/DJT is not worth anything near this valuation. It’s an unprofitable company making tiny revenues with no disclosed path to profitability. The entire company is not acting like a normal startup, and will have insanely low shareholder equity. The cash backing each share after the merge will probably be lower than any SPAC we’ve seen in the last 4 years,” u/Chester-Ming said. 

The Reddit user added that “the counter to the bearish argument is that if Trump was to win the election, TMTG and by extension Truth Social could be vastly more relevant and the fundamentals could be improved if they were to actually work towards growing the business. I don’t think this is a bad assertion to make tbh, Trump is an absolute hype machine."

Another redditor even suggested that Trump could be planning to use proceeds from the SPAC deal for unrelated funding efforts.

"It’s not a stock that has corporate fundamentals (like cash flow, earnings, etc.). This is actually a “Go Fund Me” for Trump to cover his bail bonds, lawyer fees, etc.," u/ireddit2014 said.

All eyes will be on Trump Media & Technology Group on Tuesday. The stock is popular among retail traders and is likely to see elevated levels of volatility this week. After completing its business combination with Digital World, Trump Media is set to begin trading on the Nasdaq Tuesday morning under the ticker symbol “DJT.”

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DWAC Price Action: According to Benzinga Pro, Digital World shares closed Monday up 35.2% at $50.54.

Image: Jonah Elkowitz on Shutterstock