In a wild right-wing technologist update of Thelma and Louise , it seems that both Donald Trump and Elon Musk have officially driven their respective social media companies off of a cliff. But hey, at least they’re going down together?
Trump’s Truth Social stock appears to be in serious jeopardy, according to a new report from Forbes published Saturday. Next month, Trump—who owns well over 50 percent of the company—and other shareholders will finally be able to sell their shares of the volatile stock, but that puts the stock at risk of collapse.
Earlier this month, Truth Social’s stock value plummeted following Trump’s apparent “return” to X, formerly Twitter. It was so bad that even a booming stock market couldn’t save it. This coincided with a poor second quarter earnings report that found the company lost more than $16 million , and raised just $836,900, down 30 percent from $1.2 million a year earlier. That was still far better than the previous quarterly report, which found that the company lost $327.6 million, and only raised $770,500 in revenue.
Truth Social stock has become particularly risky, because its volatility gives it a high chance of heavy selling as soon as it becomes unlocked in September, according to Forbes . This would only worsen if the board allowed Trump to sell his stocks early, capturing the current price instead of whatever they might drop to on the downward trajectory.
As for Elon Musk’s X, not even Trump returning could give it a much-needed boost. The platform’s billionaire technocrat owner has pulled the social media site into historically bad territory, according to The Wall Street Journal .
Musk acquired X in October 2022 for $44 billion, borrowing $13 billion from several banks, including Morgan Stanley, Barclays, and Bank of America. Those banks have found themselves unable to quickly offload Musk’s debt to other investors, leaving it stuck on their balance sheets, or “hung” in industry terms, straining their loan books and, in one case, even curbing their compensation.
Apparently, Musk’s X loans have been on the books for so long, they’ve outlived every unsold deal since the 2008 financial crisis, according to data from Pitchbook LCD. While there were more hung deals during the crisis, banks were able to sell or write off their hung debt within 12 months after issuing the loan. Not only is X the longest lasting hung deal since 2008, it’s also reportedly one of the biggest.
While the banks have been able to collect a hefty interest, it’s unclear how Musk will ever repay the principal if X continues on its current trajectory. Last year, X reported that its value had plummeted by more than half, to around $19 billion. When the banks formulated a plan to restructure the loan, X didn’t follow through, according to the Journal .
Unfortunately for Musk, X has been unable to fully capitalize on its recent uptick in user engagement, because Musk went out of his way to make an enemy of all advertisers everywhere, suing a group of advertisers who didn’t want to use his platform filled with blatantly pro-Nazi content.
As Musk’s adversarial streak has continued, officials at Mitsubishi UFJ Financial Group, another bank that shelled out money for the acquisition, downgraded the bank’s internal credit rating on his loan, meaning they don’t think it’s likely they’ll get paid back anytime soon.
A spokesman for the bank told the Journal , “MUFG has had several constructive conversations with Mr. Musk and his leadership team. We anticipate reaching a positive outcome regarding repayment.”
While Musk isn’t in the business of robbing banks, he’s getting pretty close to the outlaw life of Thelma and Louise. One thing has become clear: When Trump and Musk started out on their right-wing social media experiments, they thought they were really goin’ somewhere. But this is it. They’re just going.
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