Truth Social — the Trump-owned social media platform that started trading yesterday — currently has far fewer users and less income than any social network that has gone public before.

Why it matters: While the app does sell some ads, its business is practically non-existent.

• Truth Social earned $3.4 million in revenue for the first nine months of 2023 and it lost around $49 million.
• By comparison, Facebook (now Meta) earned $3.71 billion in revenue the year before it went public and was profitable.

Between the lines: Truth Social's user base is still very small, niche and not very global compared to its publicly traded social media rivals.

• SimilarWeb estimates it had 5 million monthly website visits globally in February 2024 and roughly 1 million monthly active app users in the U.S.
• The company has not reported the actual metrics, which is unusual for a social media company going public.
• Facebook had 845 million monthly active users (MAU) at its IPO in 2012. Twitter (now X), had 215 million when it went public in 2013.

Zoom in: For now, Truth is trading like a meme stock, meaning its market value is completely divorced from its financial reality.

• But once retail investors tire of the penny stock, its fate will be left to institutional investors who want to see high-growth opportunities and profit margins.
• Meme stocks like GameStop and AMC that soared during the pandemic-era retail investor bump have since crashed.

Reality check: Truth Social has yet to outline to investors its latest product plans or business strategy. The company has been plagued by business and legal challenges since it went public, including a now-settled SEC investigation and a lawsuit from former employees.

• Ahead of its launch, the company touted grand plans to start a subscription streaming service and a technology arm that would provide alternatives to internet services like Stripe and Amazon's AWS. Neither of those ideas has materialized.

Between the lines: Social media firms haven't always had their financials in order before going public. But their user bases were compelling enough to entice institutional investors for years until they started making real money.

• Twitter only ever turned a profit for two of the eight years it was public, but it had 215 million monthly active users at its IPO. Snapchat has yet to post a full year of positive net income, but it went public with 158 million daily active users and posted revenues of $4.6 billion last year.
• Truth Social, which launched in 2022, is also still young. Meta didn't turn a profit until five years after its founding. It went public in 2012. Reddit went public yesterday with 73 million daily active users. It's never posted a profit in its nearly 20-year history.

What we're watching: Other upstarts have tried to take on X to little avail, which could make it harder for investors to give Truth Social the benefit of the doubt in its early stages as a public company.

• Even when Trump has driven momentum to the app around his own app during critical news moments, like the FBI's search of Mar-a-Lago last summer, data from SimilarWeb shows that momentum was not sustained.

Go deeper: Trump's Truth Social stock soars on first day of trading