The financial losses incurred by Donald Trump’s social media platform, Truth Social
Former U.S. President Donald Trump’s social media platform, Truth Social, has incurred losses of $73 million in less than two years since its launch.
On the 13th (local time), Trump Media & Technology Group (TMTG) disclosed in a document (S-4) submitted to the U.S. Securities and Exchange Commission (SEC) that Truth Social recorded a net loss of $50 million last year and $23 million in the first half of this year.
Failed Merger
TMTG is the parent company of Truth Social, where former President Trump serves as the board’s chairman. Truth Social, officially launched in February last year, sought to raise funds through a backdoor listing on the stock market via a merger with the SPAC (Special Purpose Acquisition Company) Digital World Acquisition. However, the merger has not been completed, leading to ongoing financial difficulties.
TMTG warned that if Truth Social fails to go public, financial difficulties could threaten its survival. In a key investment risk alert, TMTG stated, “If Truth Social fails to maintain a sufficient number of followers, or if there are negative issues in the overall social media market, or if former President Trump does not devote significant time to Truth Social, it could hurt TMTG’s business activities.”
Currently, a criminal trial has named former President Trump as a defendant. He is the only former or current president to face trial in such a capacity. He faces a total of 91 charges in four indictments, including attempts to overturn the results of the 2020 election, allegations of tax evasion and financial fraud in his business, the Capitol riot, and leaking confidential White House documents.
Debt Crisis Warning
TMTG also warned of a debt crisis. TMTG said, “The management is worried about whether it has sufficient capacity to repay the debt,” and “if we cannot make substantial progress in completing the merger with the SPAC, we have internally concluded that it will be difficult to raise funds.”
After losing the 2020 election, X expelled former President Trump, who had received several warnings for inciting his supporters, following the Capitol occupation riot on January 6, 2021. He subsequently launched Truth Social and sought to raise funds through a merger with Digital World Acquisition. However, since December last year, there has been no progress after the SEC and the Financial Industry Regulatory Authority (FINRA) began investigating possible law violations during the merger process.
By. Cho Yoojin
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