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No Red Or Blue Wave Despite Social Media Predictions

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2 years ago

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For months, there was talk of an impending “red wave” that would see the Republicans take control of the House of Representatives and the Senate. Except, it wasn’t really ever as certain as some had actually predicted. As Politico.com reported, just seven weeks before the midterm elections, the GOP hope for a “takeback” of Congress was already diminishing.

In fact, after the Supreme Court revoked a 50-year constitutional right to abortion by overturning Roe v. Wade, a previously disengaged Democratic base was suddenly reignited – and throughout the summer there were those on social media suggesting it would be a “blue wave” that would come Election Day.

Breaking The Waves

As the Democratic surge had passed, modeling shifted again, and the GOP seemed predicted to win big. However, there was no wave on either side and that there were barely ripples at best. Everyone who predicted a wave on social media from either side seems to have gotten it completely wrong.

“Social media is the unguarded and largely ungoverned repository of random thoughts, emotions, conspiracies, speculation, and rumors. And once a topic gains traction, it is often amplified beyond proportion,” suggested Craig Barkacs, professor of business law and ethics in the Master’s in Executive Leadership and MBA Programs at the Knauss School of Business at the University of San Diego.

Though it was true that polls were indicating some close races, polls have also taken a reputational hit in recent years.

“To be fair, the notion that a red wave was coming was firmly rooted in empirical evidence, such as midterms that typically go against the party occupying the White House, inflation, a president with low approval ratings, and high gas price – along with the specter of a looming recession,” added Barkacs.

Thus, those proclaiming a red wave was coming were simply following what many pundits were already suggesting.

“Even though social media is not renowned for excesses of logic or reason, pushing back against such conspicuous historical trends turned out to be something few on social media were willing to do,” Barkacs continued.

Current Events

As more and more people turn to social media rather than traditional news outlets, the platforms are playing a significant role in shaping how people perceive current events. However, those “news” sources may not be all that trustworthy.

“People are prone to follow accounts and news sources that confirm their pre-existing beliefs. This means that people were likely to see news coverage that confirmed the version of the world they hoped would materialize,” explained Colin Campbell, associate professor of Marketing at the University of San Diego’s Knauss School of Business and editor-in-chief of the Journal of Advertising Research.

“Social media rewards those voices that stand out the most,” Campbell noted. “This is because more extreme views are more likely to prompt reactions – either likes or comments – from viewers, and thus are more likely to be prioritized by algorithms. This results in more extreme views being over-represented on social media and thus having an above-average influence on users.”

As a result, social media contributed to the belief from each political spectrum that a “wave” was coming, even as polls suggested very tight races.

The various algorithms may have made users think that their beliefs were shared by the majority of voters, when in fact, many of these races were quite close, said Dr. Julianna Kirschner, lecturer for the Master of Communication Management program at the University of Southern California.

“Social media platforms have contributed to polarization in political discourse because they echo back what inputs the users have provided,” she further explained. “The echo chambers in which users find themselves tend to repackage the same political content to which users have already been exposed.”

That can lead users to become familiar with narrow political discourse that supports their existing views, which they can then recycle into posts they write themselves on social media. Kirschner said that another problem for social media is the dichotomous political landscape in the United States.

“As a user, you are categorized as one thing or another: Republican or Democrat, conservative or liberal, red or blue,” Kirschner continued. “Rarely is a voter given the realistic option of choosing something else, such as a viable third-party candidate. Therefore, social media has followed suit in categorizing users through one of two lenses: Republican or Democrat.”

In essence, social media wasn’t wrong about the midterms per se. Instead, these platforms reflected back polarizing discourse to make us think one perspective was a greater representation of the voting block.

“True representation is actually more of a gray area,” said Kirschner. “Social media’s fault has been over-amplification, and our perception of the midterm elections was swayed by that feedback loop.”

That is especially true as the platforms have also proved to be those echo chambers that are highly partisan or demographically similar.

“It’s a bit ironic that social media, which so often divides people in fierce pursuit of what they think is right,” said Barkacs, “in this case unified people around a viewpoint that turned out to be so wrong.”

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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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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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