TOP STORY
📈 Trump’s Truth Social Jumps ~80% after Nasdaq Debut

Those were the words of Thomas Hayes, chairman of ~$5B Private Equity Fund Great Hill Capital, and a sentiment echoed by many on Wall Street after watching Truth Social surge nearly 80% on its stock market debut to an over $8B valuation.

The company went public on Monday via a merger with blank-check company Digital World Acquisition Corp and is now listed on the NASDAQ under the ticker $DJT.

💬 What is Truth Social?

Created in February 2022, ~12 months after Trump was removed from major platforms like Facebook and Twitter, Truth Social describes itself as “America's ‘Big Tent’ social media platform that encourages an open, free, and honest global conversation without discriminating on the basis of political ideology.”

As you can see below, the platform is quite similar to Facebook. The IOS App has a 4.6 rating on the US App Store across 115K ratings and was ranked #14 in Social Networking at the time of writing.

📊 Only $3.4M in Revenue?!

Let’s ignore politics for a second and look at Truth Social as a company. Here are some key metrics from the first 9 months of 2023:

• Revenue: $3.4M

• Net Loss: -($49M)

• Total Users: 8.9M

• Monthly Visitors: 1.48M

That means Truth Social is currently valued at over 1800x revenue 🤯. In comparison, Reddit, Meta, Pinterest, and Snapchat hover around ~5-10x revenue.

Looking at monthly usage, Meta’s platforms have ~2000x the monthly visitors of Truth Social.

🤪 Firmly in Meme Stock Territory

The mismatch between the stock and the company’s fundamentals places it “meme stock” territory, similar to stocks like Gamestop, Blackberry, and Bed Bath & Beyond.

This doesn’t mean the stock is set to crash anytime soon, it could very well continue to rise. Don’t forget that hedge funds lost ~$20B betting against GameStop (which arguably also had horrible fundamentals).

With meme stocks, all you need is enough people to believe the company goes beyond normal investment criteria, and Truth Social certainly fits that bill.

Many experts argue that enthusiasm for Trump is a key driver of the stock, with thousands of his supporters piling on to support the former president.

🤔 What does this mean for Trump?

💰 With Trump owning ~60% of the company, his stake is now worth over $5B, putting him on the list of the 500 richest people in the world.

With Trump now owing over $175M after legal troubles, this massive boost in wealth is a big turn of fortune for the former president. However, while rich on paper, Trump won’t be able to sell their stock for six months due to a lock-up period. It’s also unclear whether Trump would be able to sell without tanking the stock.

💰 Is Truth Social a Buy?

In short - who knows 🤷‍♂️

As discussed, the stock has diverged so far from its fundamental value, so regular investing concepts don’t really apply here.

Buying Truth Social (or any meme stock) is really more akin to gambling than investing. You can stand to gain a lot or lose a lot - so make sure you can stand to lose whatever you put in!

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TECHNOLOGY
😱 OpenAI Can Now Clone Your Voice in 15 Seconds

AI has evolved rapidly since the release of ChatGPT on November 30, 2022, and now a massive (and scary) new development has been announced - OpenAI can now clone your voice with only a 15-second sample 🤯

Surprisingly, OpenAI has decided against a public rollout of the features after safety concerns, specifically around the potential for the technology to be used in deep fakes and scams.

🚨 The Dangers of AI Voice Engines

It’s no doubt that AI has opened up a new wave of sophisticated scams. Money lost to scams in the US hit a record high in 2024, topping $10B.

Here are some examples of how AI Voice Engines have been used to scam and defraud:

• 💰 A worker at a multi-national firm in Hong Kong paid out $25M after instructions from the ‘CFO’ in a multi-person video conference that was entirely deep-faked

• 🗳️ In January, a realistic-sounding phone call purporting to be from President Joe Biden encouraged people in New Hampshire not to vote in the primaries

• 🤑 Elon Musk’s voice is being extensively used to promote the Quantum AI investing scam, which promises an 8300% investment return in 1-year

✨ The Benefits of AI Voice Engines

Even so, AI Voice Engines can unlock a ton of value across many business applications.

• The Norman Prince Neurosciences Institute is helping brain tumor patients recover their voice

• Spotify is translating podcasts into different languages

• Age of Learning provides real-time personalized responses to students written by Chat-GPT.

💡 Read more applications of the technology on OpenAI’s blog

⏭️ Next Steps

OpenAI is taking several steps to limit the risk and prepare the tech for a broader rollout. One is installing an inaudible audio watermark to help distinguish whether a piece of audio uses the tool. OpenAI also restricts its current partners from mimicking a voice without consent.

While OpenAI has held off for now, I’m sure this technology is coming soon - are you ready for it 👀

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EARNINGS WATCH
🍩 Krispy Kreme Stock Up 23% After McDonalds Team-up

🍩 Did you know Krispy Kreme is public? Well you do now!

Trading under the ticker $DNUT, the company rose to an over $2.5B valuation this week after announcing a partnership with McDonalds that will soon see its donuts sold in the McCafé across the USA, more than doubling the locations where it’s donuts are sold.

Krispy Kreme investors loved the news, driving the stock up 23% this week. McDonald’s investors didn’t seem to care much, with the stock ending the week down ~0.7%.

🔬 A Successful Test

McDonald's and Krispy have been testing the concept in 160 restaurants across Kentucky and Indiana, and they clearly were pleased with the results.

With a phased rollout, Krispy will deliver 3 flavors of donuts to McDonald stores daily, available individually or in boxes of 6.

Krispy Kreme's CEO says the company currently has the supply chain to service 6,000 McDonald’s restaurants and will be working to build up infrastructure to support all 13,500 locations. Nationwide availability is expected by the end of 2026.

📈 Boosting Revenue and Brand

In 2023, Krispy Kreme posted 10% revenue growth to $1.68B and 11% growth to EBITDA to $211M.

With the stock down ~20% over the past 5 years and 2% over the past 12 months, the partnership is a much-needed win for the company.

FROM THE BLOSSOM COMMUNITY
🎙️ Top Discussions this Week

👇 Click to see the full post!

🗞️ What else you might’ve missed:

• 🔐 Microsoft-backed Rubrik, a cloud and data security startup, filing for IPO next week

• 🍿 AMC fell 14% Friday after $250M stock sale announcement

• 🏦 Robinhood up 6% after announcing Robinhood Gold Card with 3% cash back.

• 🧑‍⚖️ SEC scores a win against Coinbase after judge ruled that its claims could be heard at trial.

• 🛫 Boeing up 2% after announcing CEO departure by the end of the year