Trump’s Truth Social won’t capture serious market share, Sorrell says

Anna Barclay | Getty Images News | Getty Images

Advertising guru Martin Sorrell has questioned the prospects of Donald Trump’s newly public Truth Social platform, saying it was currently “unfathomable” that clients would want to buy ads on the site.

The British businessman told CNBC on Wednesday that the former U.S. president’s social media platform has yet to prove its financial viability in an already challenging advertising market.

“It’s a bit unfathomable. What are the revenues there?” Sorrell, founder and executive chairman of digital marketing firm S4 Capital, said when asked if clients were likely to advertise.

Trump Media & Technology Group (TMTG), the company behind Truth Social, went public Tuesday after merging with shell company Digital World Acquisition in a deal known as a special purpose acquisition (SPAC).

Shares jumped more than 50% during a volatile first day of trade, before ending the session up 16%, giving the company a market cap of around $7.85 billion, according to the Associated Press.

The listing pocketed the presumptive Republican presidential candidate a paper fortune of over $4 billion for his 58% share of the company at a time when he faces mounting legal challenges. He was on the hook for a $454 million bond in a civil fraud case, but the fee was reduced to $175 million Monday following an appeal.

The fanfare comes even as the company has struggled to demonstrate a path to profitability.

“It sort of defies reality, at least at the beginning,” said Sorrell said, who is also the founder and former CEO of ad agency WPP.

A spokesperson for TMTG firmly dismissed claims that the share price move defied logic when contacted by CNBC.

Truth Social lost $10.6 million in the first nine months of 2023 on revenues of $3.4 million. According to Semafor, the

Read More ...