A week after former President Donald Trump announced plans to launch a social media platform, and shares of the SPAC - or special purpose acquisition company - associated with TRUTH Social surged on the news, some stock analysts are scrutinizing Trump's lofty new venture.
MICHAEL PACHTER: "It's a horrible idea."
Michael Pachter is the managing director of equity research at Wedbush Securities.
PACHTER: "It's one thing to build a news channel like Fox or OAN (One America News Network), that's a cable channel and can thrive on the million users, viewers, or half a million viewers or smaller, because the carriage fees on cable are pretty low. But a social media network is going to depend upon advertising dollars, and making a social media channel that is dedicated to a small subset of users is going to limit its potential."
Trump lost his social media megaphone this year, when Twitter, Facebook and other social media platforms either permanently or temporarily banned him from their services, after he was accused of inciting violence at the U.S. Capitol on Jan. 6.
Now, Trump is seeking another direct line to his supporters as he mulls another presidential run in 2024.
TRUMP ON SEPTEMBER 28, 2015: "It will be simple, it will be easy..."
Like Pachter, analyst Max Wolff, the CEO Systematic Ventures, also sees challenges, telling Reuters that entering into competition with other social media platforms is not easy.
WOLFF: "Look, building a new social media is very, very difficult medium, because the real value here is the people on board. So you need to catch up to Facebook, you know, you have the small task of onboarding a few billion people, which might sound easy, but it could be tricky... So, odds are that this $2.2-and-counting-billion undertaking will end pretty badly, especially if it's built around one person who, you know, however dynamic, is older and maybe past that person's peak influence and social footprint."
But some believe there are people out there who have never been more starved for content from the former president.
And shares of the SPAC linked to the new social media venture have been snapped up by amateur traders and Trump supporters, including U.S. Representative Marjorie Taylor Greene, who bought as much as $50,000 worth, according to a regulatory filing.
Trump can also point to his - at one time - enormous social media following and NBC's hit show "The Apprentice" as past successes that could bode well for a new media company.
But Pachter says it's Trump's past failures and bankruptcies that loom larger.
PACHTER: "No business I can think of that he's ever been in, no non-real estate business, ever made money. He failed in casinos, airlines, steaks, wine, ties, everything else."
In a press release, the CEO of Digital World Acquisition, the Florida-based shell company linked to Trump's new media enterprise, said the partnership would create public shareholder value and called it "one of the most promising business combination partners to fulfill that purpose."
TRUTH Social is set for a beta launch next month and full rollout in the first quarter of 2022.