Former President Donald Trump’s ambitious plan to create his own social media empire has hit a series of roadblocks, as his company Trump Media & Technology Group (TMTG) faces mounting financial losses, regulatory scrutiny, and investor backlash.
TMTG, which launched its flagship platform Truth Social in October 2021, has lost $73 million since its inception and has no revenue, no employees, and no assets other than its agreement with Digital World Acquisition Corp. (DWAC), a special purpose acquisition company (SPAC) that will take it public.
While TMTG was valued at $875 million when the merger with DWAC was first announced, Trump revealed in his latest financial disclosure form that his controlling stake is valued at between $5 million and $25 million.
The Securities and Exchange Commission (SEC) is investigating the merger deal, as well as the trading activity and disclosures of both companies.
Meanwhile, DWAC had about $1 billion worth of securities purchase agreements with some institutional investors, with the company noting in the regulatory filing that those investors had sent it termination notices for about $467 million.
Some analysts and experts have expressed doubts about the viability and value of TMTG and Truth Social, which aims to compete with established social media giants like Facebook and Twitter.
“It’s a scam. It’s a way for Trump to raise money from his supporters without having to actually deliver anything of value,” said Scott Galloway, a professor of marketing at New York University.
Truth Social has also faced legal and technical challenges, such as a cease-and-desist letter from Twitter for violating its terms of service, a data breach that exposed user information.
Trump, who was banned from major social media platforms after the January 6 Capitol riot, has touted Truth Social as a platform for “free speech” and a way to “stand up to the tyranny of Big Tech.” However, the platform’s terms of service state that it can remove any content that it deems “harmful” or “inappropriate” at its sole discretion.
– Trump’s Truth Social Has Lost $73M Since Launch, New Filing Shows, Newsweek, November 13, 2023
– Trump Media’s funding partner says it’s returning $1 billion to investors, with many asking for money back, CBS News, October 13, 2023
– Donald Trump’s Truth Social Dealt Major Blow, Newsweek, November 14, 2023