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What to expect from Trump's new social media platform

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Yahoo Finance’s Rick Newman breaks down Trump's remarks on his planned social media comapny.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back, everybody. Former President Donald Trump is speaking out about his new social media platform. It's called "Truth Social," and Trump says it will combat censorship and the cancel culture brought on by big tech. Yahoo Finance's senior columnist Rick Newman here now with just what Mr. Trump had to say about his new social media platform. Rick?

RICK NEWMAN: Well, the thing that caught my eye was Trump saying that this is going to be a place where people of all political stripes are welcome. [LAUGHTER] This is the same-- this is the same guy who required people to sign nondisclosure agreements when they joined his company. And he even tried to get employees at the White House-- they did sign nondisclosure agreements, because Trump doesn't want anybody to say anything critical of him.

I mean, there are just multiple examples of when he was-- he was president, that he was so fragile that if anybody dared contradict him in any public way, they either got chastened, or in some cases, fired. So I think it's a complete nonsense that Trump's social media platform, if it ever gets off the ground, is going to be a place where people of all political persuasions are going to have a vigorous, earnest conversation, as Trump says. That's just not going to happen.

ALEXIS CHRISTOFOROUS: Well, I think a lot of people may agree with you, because the SPAC that he was going to sort of partner with exploded, right? It went off the charts, and it's down now about 11%. So is some of the enthusiasm wearing off of this thing, do you think?

RICK NEWMAN: Well, it depends what your starting point is. So it was up 800%-- this was a SPAC called Digital World Acquisition Corp., the ticker is DWAC. Almost nobody had heard of this, even though it went public in September-- you know, very low-- low profile offering.

But then came the came the news last week that this company was doing a merger with a new Trump entity to create this new Trump network, and on that day the stock of DWAC, which was also already public, went up 800%. So I just looked a minute ago, it looks like today it's down 20%. So it's still up several hundred percent from where it started before Trump was lined up with it, but I guess what investors are saying today is that was an overshoot last week, and this stock is down again. 20% today on this news that Trump put out, sort of, you know, the statement Trump put out today sort of was the first time he'd put his own imprimatur on the site and said here's what it's going to be.

And you know, investors just weren't buying it. Doesn't mean it's-- doesn't mean it's not a legitimate play. But I think investors are more skeptical today than they were last week.

ALEXIS CHRISTOFOROUS: And do we have any idea when Truth Social is going to come online, Rick?

RICK NEWMAN: We don't. As far as I know, they have not put out any details yet about how they're going to do this. So-- so I-- you know, there is some real money behind this. This is not a bunch of also-rans.

Barclays is behind-- has put some money into this. A hedge-- Hindenburg-- excuse me, there's another-- that's the wrong-- that's the wrong name of the company. There's a hedge fund backed by JP Morgan that put some money into this. So there's some smart money in it, which suggests they-- they will actually get to the point of building a business.

But look, Twitter and Facebook obviously have been around for a long time. They're very established. And it's hard to see how anybody who is not a Trump supporter would have any interest in joining the Trump social network-- network, because it is for sure just going to be a Donald Trump echo chamber. So his fans will go there-- some of them will, anyway-- but I just don't see how he's going to get anybody who's not already in his orbit.

ALEXIS CHRISTOFOROUS: All right, we will be watching and waiting. Rick Newman, Thanks so much.