Is the Truth Social platform heading towards shutdown?

The prospects of Trump Media and Technology Group (TMTG) of staying afloat are slim and the platform former president Donald Trump, the Republican candidate for a new term in the White House, uses to spread racist and conspiracy theories may shut down without the planned merger with Digital World Acquisition Corp. (DWAC), a special purpose acquisition company (SPAC).

DWAC warned in the S-4 form for the Securities and Exchange Commission (SEC) that Truth Social might not survive without this merger.

TMTG, which owns the social media platform Truth Social, has accumulated a $31.6 million loss since its founding in February 2021, the recent SEC filing shows.

According to DWAC, TMTG reported a $59.1 million loss in 2021 with $2.1 million in sales, earned $50.5 million in profit in 2022 with $1.4 million in sales, and lost $23 million in the first half of 2023 with $2.3 million in sales.

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These financial disclosures coincide with Trump’s legal battles and his prominence as the 2024 Republican presidential candidate.

DWAC described the merger as essential to TMTG’s survival, citing ongoing negative cash flow and substantial debt. The merger could infuse the capital needed to address TMTG’s financial difficulties and allow it to sustain operations.

On the other hand, the money-losing social media business also faces growing competition from X (formerly Twitter), a platform owned by Elon Musk, who is actually an ally of Donald Trump and personally promotes the latter’s agenda. Earlier this year, X disabled hate speech moderation and falsehood screening, becoming one of the most toxic sources of information globally.

Must also reinstated Trump’s account on X after months of blocking for violation of its rules. Trump returned to X in August but still uses Truth Social as his primary platform.

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According to DWAC, Trump’s presence initially boosted Truth Social, yet the company now relies heavily on his personal engagement. Should the former president stop posting there, the platform will go idle and TMTG will go bankrupt, DWAC admitted, adding that despite efforts to grow and monetize Truth Social, even Trump’s continued involvement may not ensure the platform’s viability.

TMTG wouldn’t be the first business failure of Donald Trump – so far, he has filed for bankruptcy on behalf of a dozen of companies and ventures. Most notable failures are Trump Airlines, sunk in debts (1989-1992); Trump Foundation, a fraudulent charity (1988-2018); Trump University, a fraud project (2004-2010); Trump Cologne, succumbing to tough competition (2004-2015); Trump Vodka, poor demand (2006-2011); Trump Steaks, none sold (2007); GoTrump.com, search engine without traction (2006-2007); Trump Mortgages, hit by housing crisis (2006-2007); Trump Magazine, fell under overinvestment (2007-2009); New Jersey Generals, a loser football club (1983-1986).

Trump recently launched a crypto project called World Liberty Financial, but public interest in his token is low. 

Whether Truth Social/TMTG is just another of Trump’s failure remains to be seen.

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