American officials warn against impulsive posts by Donald Trump on social media, which may reduce the chances of a peaceful resolution of the conflict between the United States and Iran.
Trump's statements discourage Tehran from making peace?
As Bloomberg reports, two people familiar with the diplomatic process currently unfolding in the Middle East say that the Republican's statements have a negative impact on the ongoing negotiations conducted through mediators.
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Posts, often containing threats and insults directed at well-known individuals, combined with the decision to continue the blockade of the Strait of Hormuz, may hinder Tehran's authorities from deciding to sit at the negotiating table.
Moreover, Iranian representatives were expected to react especially to Trump's words about "throwing the rest of the country into the air" and pulling it back "to the age of flint", which they considered humiliating to their authorities.
"All participants requested anonymity due to the delicate nature of the matter," the agency said.
Bloomberg reminds that on April 7, just before announcing a ceasefire between the United States and Iran, Trump warned of the destruction of "the entire civilization".
The White House then declared that the decisive tone of the Americans helped persuade Iran to agree to end hostilities.
Donald Trump's main information tool is the social media platform Truth Social, owned by Trump Media & Technology Group, created after the Republican was blocked on alternative communication channels.
The president's official profile currently follows about 12,5 million people.
"It's hard to say that from the beginning it was designed as a tool to influence markets. That does not mean, that today it cannot be perceived that way", said in an interview with FXMAG Andrzej Gwiżdż, an analyst of the investment platform Port.
Let's not deceive ourselves, in a certain sense such a tool is.
Trump's messages published on Truth Social can trigger massive market movements, and before some price‑setting messages we saw suspicious transactions.
In such a situation it is obvious that someone had this information earlier and was exploiting it.
The expert emphasized that assessing the threat arising from messages posted on Truth Social requires caution.
Here we must separate two things. The idea of freedom of speech is one thing, and using the word as a tool to influence markets is something entirely different.
Freedom of speech does not justify abuse. If everyone received information at the same time, one could say that the market is simply difficult, but everyone has it equally hard.
"However, if someone earns from these messages before they are public, we are no longer talking about freedom of speech, but about manipulation and abuse," the expert said.
Attachment. One of Donald Trump's latest posts about the order to "shoot down" a ship in the Strait of Hormuz issued by the United States president to the U.S. Navy
Source: Truth Social.
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Trump Media shares are undervalued. Expert explains what weighs on the company's valuation
The share price of Trump Media & Technology Group, owner of the Truth Social platform, at the end of April hovered around 9 USD per share, compared to over 20 USD quoted in the same period last year.
Andrzej Gwiżdż explained which factors may affect the lack of popularity of the company among investors.
In my opinion there are many of these factors. After the election victory we observed an inflow of speculative capital into the company. The company has attracted speculative and retail capital, not institutional from the beginning.
The market largely bought the political narrative and the bet that Trump's return to the White House would automatically translate into an increase in the importance of Truth Social.
"When that euphoria started to fade, the weak fundamentals simply surfaced and selling pressure appeared," he said.
The expert claims that the key problem is the fact that the company does not operate "like a typical technology firm".
Truth Social remains a rather niche platform with a strongly political profile. It does not build a broad user base or a network effect that usually underpins high valuations in social media.
Even if the platform generates attention, it does not translate into business in a satisfying way. Advertisers approach highly polarized environments cautiously, so monetization potential is limited.
Finally, the challenge remains "the concentration of risk around Donald Trump".
The platform's value derives mainly from his activity and political position, and that weakens. This means a lack of model durability and high uncertainty in the long term. For investors this is a significant minus.
Additionally, the company does not widely report key user and engagement metrics, making it difficult to assess its real growth. The lack of data increases the risk discount, because the investor cannot verify the business potential.
"The lack of popularity of the listings results from a combination of weak fundamentals, limited scale, high dependence on one person and weak growth prospects. The market does not see a predictable growth model here, only a speculative asset, which naturally translates into a lower valuation and weaker demand," the analyst concluded.
However, in my assessment this is not the main problem of this company. For investors it is more important whether the business creates value for shareholders.
If Trump Media had strong fundamentals and growth prospects, such controversies would likely not have stopped the price. The market often tolerates large risks if there is a good business behind them.
Therefore, in my opinion, the bigger problem is not how Truth Social is perceived in the context of market influence, but that the company itself does not deliver the business model investors expect. And that weighs much more on the valuation today.
Chart. Trump Media & Technology Group Corporation share price
Source: TradingView.
The above material is informational and does not constitute an investment recommendation. Investing involves risk, and every investment decision should be made independently, taking into account individual financial circumstances and investor goals.
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Source: Bloomberg.
