Media
Most companies probably don't need social media – Yahoo Canada Finance
Whenever a new social media platform emerges and catches on with the public, certain people – called squatters – flock to various handles in a mad grab for @coke, @apple, @nike, and so on.
The idea is that brands ascribe such importance to their social media presence, that they’ll offer thousands for the handle, providing a quick buck for those with fast fingers and early access.
Brands usually do follow the crowd and assign social media managers to populate the new channels that make the cut, often buying their names from these username squatters. (A prominent exception is the owner of @GQ, who kept their Twitter handle, unmotivated by Condé Nast’s offerings, because it’s his nickname).
But recently, some brands have begun to question the value of social media as a place to promote their brand, chasing earned engagement and paying for promotion. What if it’s not worth the drama, expense, and possible unforced errors? What if instead of saying something, you said nothing?
‘Social media doesn’t align’
On Jan. 8, just after the U.S. Capitol was stormed, candle company Keap decided to shut down its social media pages. In an email, the B-corp’s co-founders wrote that keeping a presence didn’t work for the company.
Stephen Tracy, who founded the company with Harry Doull after they worked at Google, wrote to customers that it was trying to foster connections in “our own lives,” and considered roadblocks to this progress.
“The answers are plentiful,” he wrote, “but one common thread often emerges: addictive technology that keeps us distracted and restless.”
Working at Google, Tracy added, provided an inside perspective on the motivations of the tech industry, namely engagement and the endless scroll. These habits were antithetical to the candle company’s mission.
“Armed with an insider’s knowledge of how these addictive technologies affect our lives, Harry and I have often felt that being on social media doesn’t align with what Keap is about as a company,” Tracy wrote to customers, advising them that the company’s newsletter would be their main source of communication henceforth.
“Though we had to overcome some initial uncertainty, we feel far more excitement about reclaiming our time from social media,” Tracy wrote.
Though it’s not common, this thinking isn’t unique to Keap Trader Joe’s, for example, does not have a Twitter account. British cosmetics brand Lush also shut down its Twitter account because of its perceived toxicity of social media.
It also extends beyond social media into the real world. Companies like REI have made the choice to opt out of the traditional Black Friday frenzy, closing its stores and giving employees the day off. Instead REI encourages Americans to #optoutside. If someone wants their stuff they know where to find them. Black Friday and social media are both defaults for many businesses, representing a standard, whose benefit is often unquestioned.
Is it worth it?
In a story in Harvard Business Review from 2017, researchers set out to study the effectiveness of social media in a marketing sense. At the time, 80% of Fortune 500 companies decided to have a Facebook presence, they wrote, with many marketers viewing the number of followers and likes as valuable since someone who follows a brand might be more inclined to make a purchase. They also examined paid promotion, when a company pays the platform to put its post in front of a group of users.
“The results were clear: Social media doesn’t work the way many marketers think it does,” the authors wrote. “The mere act of endorsing a brand does not affect a customer’s behavior or lead to increased purchasing, nor does it spur purchasing by friends.”
In other words, customers follow brands – brands don’t create new customers by adding follows.
The main takeaway from that study was that branded content can work well, but that companies ought to think critically about what they’re doing — just like the candle company.
Lauren Mathis, who founded a network of B-corps (companies with a private certification regarding social and environmental responsibility) in New York, told Yahoo Finance that social media has come up frequently in discussions with members, who are trying to be critical about their decisions and their broader impacts.
Mathis said that social media took over so quickly as a default way of operating and people don’t realize the other ways to do businesses until they consider leaving. “There’s this illusion we need it and it’s the only place to do business. I think we just need to break apart that illusion,” she said.
‘RIP Carrie Fisher, you’ll always have the best buns in the galaxy’
It’s not hard to find a list of extremely cringeworthy unforced errors made by companies when it comes to social media. When a brand goes business casual on the internet, it can often result in something “fun,” making mild jokes and ribbing competitors, like when Wendy’s makes fun of other fast-food chains. That might be nice for the brand — somehow, in a goodwill sort of way — but it could easily result in something like Cinnebon’s infamous tweet commemorating the late Carrie Fisher, tweeting “RIP Carrie Fisher, you’ll always have the best buns in the galaxy,” which led, of course, to an apology.
Thus, brands need to evaluate the value-add of their social media presence. What is the upside for the brand? What does this goodwill exactly mean? I, personally, am a big fan of Spark Notes’ Twitter account, but have never used their services and would not (they provide summaries of books to high schoolers who don’t do the reading as well as other study guides). Whatever goodwill the company cultivates will do nothing for its bottom line. The TikTok generation barely even uses Twitter, but the company’s social media managers keep putting delightful videos into my stream. At least for now, this value, whatever it is, outweighs accidentally putting their foot in it, in the company’s view.
This nebulous upside is the case across the board at many companies. More than 326,000 people follow @ExxonMobil on Twitter. Why? Even Salesforce, a B2B company has 537,000 accounts following it. Both have extremely minimal engagement. Are people reading these tweets? Is this necessary? Prominent anti-Twitter thinker Alex Balk, co-founder of the Awl, once gently reminded readers that if important news breaks on Twitter, you’ll find out very soon anyway.
Tesla and Berkshire Hathaway
A famous example of an expensive Twitter mistake was Elon Musk’s “funding secured” tweet in 2018, where he used the weed number (420) and then paid the SEC a fine of $20 million for it.
Musk said it was “worth it” and it’s hard not to believe that it was. The Tesla CEO has since become the world’s richest man, and part of that is due to his social media presence, his pulpit from which he tells it on the mountain to his acolytes — who either buy his cars or buy Tesla stock. Social media is a huge part of that company and its mystique.
But what if he didn’t tweet?
Take Warren Buffett, the “Oracle of Omaha,” whose every word creates headlines just as Musk’s do — even after many decades. When a fake Twitter account emerged in 2018 (almost) bearing his name (“Buffet”), social media went wild with excitement. Kanye West followed the account at the time.
“I just think there’s other things in life I want to do than tweet. I am not that desperate for somebody to hear my opinion,” the real Warren Buffett said at the time, in the aftermath. “I put out an annual report. I do not have a daily view on all kinds of things.”
The few tweets Buffett’s public Twitter has done were executed by a “friend of his,” a spokesperson for Berkshire said at the time.
Not only is this a flex — he’s not thirsty, people — Buffett sees the value in occasional missives rather than a play-by-play, giving him time to refine opinions and really decide what’s worth sharing. And, it makes any communiqué an event.
This same discipline can be applied to the company writ large. Berkshire, which is not consumer facing for the most part, has a website that I could design (the only thing I can do in html is make links and format text) and no social media. (If a squatter has the keys to the @berkshire account on Twitter, they don’t appear to have convinced the company to buy them.)
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Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter @ewolffmann.
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.
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.
Media
Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition
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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