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Messenger implosion: I know what those journalists were thinking. I thought it about Fusion.

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7 months ago

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Many media observers have compared the meltdown of the Messenger—which blew through $50 million in under a year and pursued a growth plan better suited to 2014—to the disaster that was Quibi, the short-form video startup that collapsed basically as soon as it launched in 2020. But the real comparison that should be made here is to Fusion, where I worked for a little over a year, from 2014–16. Yes, Fusion lasted longer, and even merged and mutated a few times before finally taking its last breath (as Splinter News) in 2019. (Well, it could always be reanimated, hopefully not like the Hairpin.) But it comes to mind because it was a similar roller coaster. I would be lying if I said that when I took the job, I was fully confident in Fusion’s future. And once I arrived, I never had any idea how in the world we were going to last.

So why did I take a job at a place I wasn’t positive would survive, let alone thrive? In 2014 it was different than it is today. Facebook was still a fire hose of clicks, and a bunch of places were dedicated to riding the wave, from Fusion to Mashable to Vocativ. Even more legacy media brands were benefiting from the platforms. This prosperity meant there were a lot of jobs. The media business expanded, audience development became a thing, and there was a lot of hopping around, at least for some of us. That was fun! It took me from Adweek to Yahoo News to NBC News to Fusion, and I learned new things at each place, not just about how to distribute on the platforms, but about how to use them for newsgathering, for contacting sources, for spotting trends. As much as I think that what Facebook wreaked on media overall is terrible—and good riddance!—there were some upsides. More jobs and diversity in our business were two.

I was working at NBC News when the opportunity at Fusion materialized. I was looking to leave my role running the digital newsroom at the network—there was a leadership change at the top, and I didn’t agree with the strategy being imposed on me and my team—and I called my friend Anna Holmes to tell her what was going on. She was at Fusion. “You should come here,” she said. “We could use someone with your skills.” So what happened was I had a few meetings, and they offered me a big job with a hugely inflated title—global news director—and a ton of money. (Not Messenger EIC money, but still.) I didn’t really understand what Fusion was, but there were some cool people there and I’d figure out my job when I got there, right?

Well, sort of. There was a lot of confusion and shuffling and changing of roles—eventually, my job narrowed to oversee 2016 election stuff—but none of that is all that important. What is important is that once I got there, I understood that in a year’s time we needed to double our traffic—I cannot remember if the metric was unique visitors or page views—in order to meet the overall revenue goals agreed to by our executives. It was daunting. Fortunately, we had an audience development team that would help distribute our work in a way that would drive this growth.

Unfortunately, our editorial mission—to cover underserved communities, to focus on social justice, to focus on millennial readers and generally push for progressive social change—was fairly misaligned with our packaging strategy, which was ripped from Upworthy.

So, all along this brief and stressful ride, I wondered: How long will we/Fusion last? Men at the top had shelled out exorbitant salaries to big names, execs, and newsroom leaders. (I would bundle myself in that last category, based on the amount of experience I had at the time.) We even had a future conspiracy theorist being paid handsomely for documentary work that largely never materialized. People attended Davos. Increasingly, the brass asked for viral hits while our newsroom had been assembled to do the meaningful, impactful journalism we were told would define Fusion. At one point in late 2015, I got a call from an executive asking me if I wanted to do a Fusion bus tour across America; he’d met a guy who specialized in this and we could bankroll it as long as I could get the payment completed before the end of the year. (Budgets are always use-it-or-lose-it.) There were hundreds of thousands of dollars there for me to just …. do a bus tour. I did plan a bus tour, although I left Fusion before the project came to fruition. (When I got to HuffPost in 2017, though, we executed my original vision for this project as Listen to America, a career highlight for myself and lots of other folks who were part of it.)

My point is: It felt as if there was money everywhere at Fusion. There even WAS money at Fusion, for a while. But I knew even early on that the money continuing to flow was contingent on a kind of growth that we were never going to find. And that meant that the revenue to sustain us was never going to be there. I suspect that a number of folks at the Messenger had these same fears, feelings, suspicions. How could they not have, given the bombast of the owners from the outset, claiming they could do something—basically, rejack social media in order to bring in millions of dollars in revenue—that experts at that very thing had failed to achieve after years of trying?

I left Fusion in 2016 to embark on a different, fatally flawed project that I won’t catalog here. It was bittersweet. I did have a sense of relief because sometimes things are so broken and tangled that even people like myself, who relish taking on the myriad problems of newsrooms and the news business, cannot see a path forward. But I also felt extremely guilty. I had hired some great people into Fusion—the tiny, optimistic side of myself hoped that if we did get the right team, we would crack a code—and I was abandoning them, not to a sinking ship, but to a slowly leaking one. A lot of very, very excellent journalists worked at Fusion and Splinter. I hope they can at least still access their clips.

I can only imagine the thought processes of people who left good jobs to go to the Messenger. Perhaps they were just offered a ton of money (seems conceivable, based on what we know about the EIC’s salary and the flagrant spending on office space) and couldn’t turn it down. (Who can blame them, in this industry?) Perhaps, like me at NBC News, they were unhappy where they were and figured: Why not take a risk? Perhaps, like the writer of this good piece about the Messenger’s last day, they were freelancing and figured that trying a full-time gig could bring some upside. (And it may have, except that the Messenger seems to have erased all of its writers’ work.)

Or perhaps they actually believed they could pull it off, or that the executives above them could. I do not blame anyone for believing. I suppose there are still folks out there who haven’t had their hearts ripped out by this business and who can still be receptive to bombastic pronouncements of the likes we heard from the Messenger’s CEO. Although I haven’t met anyone like that in a very, very long time.

 

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Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

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3 weeks ago

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August 23, 2024

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Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

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Arizona man accused of social media threats to Trump is arrested

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3 weeks ago

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August 23, 2024

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Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

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Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition

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3 weeks ago

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August 20, 2024

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Tech News in Canada

Trump Media & Technology Group’s stock has taken a significant hit, dropping more than 11% this week following a disappointing earnings report and the return of former U.S. President Donald Trump to the rival social media platform X, formerly known as Twitter. This decline is part of a broader downward trend for the parent company of Truth Social, with the stock plummeting nearly 43% since mid-July. Despite the sharp decline, some investors remain unfazed, expressing continued optimism for the company’s financial future or standing by their investment as a show of political support for Trump.

One such investor, Todd Schlanger, an interior designer from West Palm Beach, explained his commitment to the stock, stating, “I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech.” Schlanger, who owns around 1,000 shares, is a regular user of Truth Social and is excited about the company’s future, particularly its plans to expand its streaming services. He believes Truth Social has the potential to be as strong as Facebook or X, despite the stock’s recent struggles.

However, Truth Social’s stock performance is deeply tied to Trump’s political influence and the company’s ability to generate sustainable revenue, which has proven challenging. An earnings report released last Friday showed the company lost over $16 million in the three-month period ending in June. Revenue dropped by 30%, down to approximately $836,000 compared to $1.2 million during the same period last year.

In response to the earnings report, Truth Social CEO Devin Nunes emphasized the company’s strong cash position, highlighting $344 million in cash reserves and no debt. He also reiterated the company’s commitment to free speech, stating, “From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”

Despite these assurances, investors reacted negatively to the quarterly report, leading to a steep drop in stock price. The situation was further complicated by Trump’s return to X, where he posted for the first time in a year. Trump’s exclusivity agreement with Trump Media & Technology Group mandates that he posts personal content first on Truth Social. However, he is allowed to make politically related posts on other social media platforms, which he did earlier this week, potentially drawing users away from Truth Social.

For investors like Teri Lynn Roberson, who purchased shares near the company’s peak after it went public in March, the decline in stock value has been disheartening. However, Roberson remains unbothered by the poor performance, saying her investment was more about supporting Trump than making money. “I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said, adding that she sees Trump’s return to X as a positive move that could expand his reach beyond Truth Social’s “echo chamber.”

The stock’s performance holds significant financial implications for Trump himself, as he owns a 65% stake in Trump Media & Technology Group. According to Fortune, this stake represents a substantial portion of his net worth, which could be vulnerable if the company continues to struggle financially.

Analysts have described Truth Social as a “meme stock,” similar to companies like GameStop and AMC that saw their stock prices driven by ideological investments rather than business fundamentals. Tyler Richey, an analyst at Sevens Report Research, noted that the stock has ebbed and flowed based on sentiment toward Trump. He pointed out that the recent decline coincided with the rise of U.S. Vice President Kamala Harris as the Democratic presidential nominee, which may have dampened perceptions of Trump’s 2024 election prospects.

Jay Ritter, a finance professor at the University of Florida, offered a grim long-term outlook for Truth Social, suggesting that the stock would likely remain volatile, but with an overall downward trend. “What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter said, highlighting the company’s struggle to produce a sustainable business model.

Still, for some investors, like Michael Rogers, a masonry company owner in North Carolina, their support for Trump Media & Technology Group is unwavering. Rogers, who owns over 10,000 shares, said he invested in the company both as a show of support for Trump and because of his belief in the company’s financial future. Despite concerns about the company’s revenue challenges, Rogers expressed confidence in the business, stating, “I’m in it for the long haul.”

Not all investors are as confident. Mitchell Standley, who made a significant return on his investment earlier this year by capitalizing on the hype surrounding Trump Media’s planned merger with Digital World Acquisition Corporation, has since moved on. “It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.” Now, Standley is staying away from the company, citing the lack of business fundamentals as the reason for his exit.

Truth Social’s future remains uncertain as it continues to struggle with financial losses and faces stiff competition from established social media platforms. While its user base and investor sentiment are bolstered by Trump’s political following, the company’s long-term viability will depend on its ability to create a sustainable revenue stream and maintain relevance in a crowded digital landscape.

As the company seeks to stabilize, the question remains whether its appeal to Trump’s supporters can translate into financial success or whether it will remain a volatile stock driven more by ideology than business fundamentals.

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