Below I pitch a $DWAC / Trump-SPAC bull case.
Getting a social platform off the ground is very doable. Getting a few million users is also very doable.
TRUTH likely needs an ad model + a subscription tier.
So what might the numbers look like if we give TRUTH credit?
🧵👇
1/x
Getting a social platform off the ground is very doable. Getting a few million users is also very doable.
TRUTH likely needs an ad model + a subscription tier.
So what might the numbers look like if we give TRUTH credit?
🧵👇
1/x
If TRUTH is only extreme Trump fans, substantial ad monetization will be hard.
BUT let's assume TRUTH pulls it off reasonably well:
10mm DAUs
Bifurcating a subscription tier is also not easy (see Twitter), but let's assume a *very* strong 10% free-to-pay conversion.
2/x
BUT let's assume TRUTH pulls it off reasonably well:
10mm DAUs
Bifurcating a subscription tier is also not easy (see Twitter), but let's assume a *very* strong 10% free-to-pay conversion.
2/x
Bull case on *just* TRUMP Social:
• 10mm DAUs
• Ad ARPU of $3/m
• 1mm paid subs (10% free-to-pay conversion)
• Subs net ARPU of $5/m
(10 x $3 x 12) + (1 x $5 x 12) = $420mm of revenue
40% EBITDA margins = $168mm EBITDA
10x Revenue or 25x EBITDA =
$4.2B EV
Not bad.
3/x
• 10mm DAUs
• Ad ARPU of $3/m
• 1mm paid subs (10% free-to-pay conversion)
• Subs net ARPU of $5/m
(10 x $3 x 12) + (1 x $5 x 12) = $420mm of revenue
40% EBITDA margins = $168mm EBITDA
10x Revenue or 25x EBITDA =
$4.2B EV
Not bad.
3/x
Do I think really that's possible? Sort of. Not *likely*, but - yes - possible.
It will require real execution, which is experience nobody involved in this business has (at least not in a business remotely like this).
However, I think it's wrong to assume it's impossible.
4/x
It will require real execution, which is experience nobody involved in this business has (at least not in a business remotely like this).
However, I think it's wrong to assume it's impossible.
4/x
TBF, I have not yet given value to Trump TV or Trump Digital Infrastructure (i.e., AWS, Stripe).
There may be a legitimate opportunity for a non-woke tech infrastructure platform. Personally, I'd welcome that.
Do I think Trump can execute on that? No.
But it's *possible*.
5/x
There may be a legitimate opportunity for a non-woke tech infrastructure platform. Personally, I'd welcome that.
Do I think Trump can execute on that? No.
But it's *possible*.
5/x
So, double the $4.2B EV to give credit for option value on execution beyond TRUTH Social.
= $8.4 B
The pro forma announced deal valuation at $10 would be $1.7B.
$8.4 / $1.7 = 5x or $50/share (vs $41 now).
Anything is possible.
While my view is this is highly unlikely...
6/x
= $8.4 B
The pro forma announced deal valuation at $10 would be $1.7B.
$8.4 / $1.7 = 5x or $50/share (vs $41 now).
Anything is possible.
While my view is this is highly unlikely...
6/x
...Trump really does deliver butts. That is reality.
Butts have eyeballs and eyeballs monetize.
As I wrote this morning, I view DWAC as funny, but uninvestable: long or short. Nobody will out-meme stonk Trump - he's been training for this moment his whole life.
Thoughts?
END
Butts have eyeballs and eyeballs monetize.
As I wrote this morning, I view DWAC as funny, but uninvestable: long or short. Nobody will out-meme stonk Trump - he's been training for this moment his whole life.
Thoughts?
END
If you are interested in more of my poorly informed takes on a non-existent business, join us in a few hours:
https://twitter.com/AndrewRangeley/status/1451168947315822598?s=20
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