Topline
Former President Donald Trump’s social media site, Truth Social, has lost $73 million since its launch last year, according to a regulatory filing made on Monday that raises concern about the platform’s financial condition and its ability to continue operations.
Trump’s Truth Social platform has lost $73 million since its launch last year.
Key Facts
Digital World Acquisition Corp, the special purpose acquisition company that intends to merge with Truth Social’s parent firm Trump Media & Technology Group (TMTG), disclosed the social media platform’s financial numbers in an SEC filing.
The filings show Truth Social lost $50 million in 2022 and another $23 million in the first half of 2023.
In its first year of operation, the company reported net sales of just $1.4 million, while the number for the first half of 2023 is $2.3 million.
The filings also disclosed that former Congressman Devin Nunes, who serves as TMTG CEO, was paid $750,000 in 2022.
The poor financial numbers raise “substantial doubt” about TMTG’s “ability to continue as a going concern,” the filing notes—although it is unclear how much of a financial runway the company has left.
Crucial Quote
“TMTG believes that it may be difficult to raise additional funds through traditional financing sources in the absence of material progress toward completing its merger with Digital World,” the filing adds. The SPAC merger between TMTG and DWAC was first announced in 2021 but the deal has been mired in legal trouble and its completion deadline was extended by another year in September.
What To Watch For
One of many potential risks outlined by the company includes Trump, TMTG’s chairman. The filing notes that the company’s success is heavily tied to Trump’s “reputation and popularity” and it “may diminish” if the former President’s popularity “were to suffer.” Highlighting Trump’s many ongoing legal cases the filing notes that an “adverse outcome in one or more” proceedings may also negatively impact TMTG and Truth Social.
Big Number
$5 to $25 million. That is the estimated value of TMTG, according to financial disclosures made by Trump to the Federal Election Commission earlier this year. That is a pretty dramatic decline from the $875 million valuation for the social media company when the SPAC merger with DWAC was first announced.
Further Reading
Trump’s Truth Social Has Lost $73M Since Launch, New Filing Shows (The Hollywood Reporter)
Trump’s SPAC Loses Nearly $200 Million In Stock Purchase Deals (Forbes)
