Former U.S. President Donald Trump’s social media platform Truth Social has lost $31 million since its launch in early 2022, according to a securities filing by Digital World Acquisition, the SPAC that plans to merge with the company.
Trump had announced the launch of his social media app in Oct 2021, saying it would “stand up to Big Tech” companies such as X (formerly known as Twitter) and Facebook, both of which had previously barred him.
Truth Social’s 861,000 active monthly users on iOS and Android as of October amounted to barely 1% of those on X.
Trump Media & Technology Group’s (TMTG) independent registered public accounting firm has indicated that the financial condition raises substantial doubt as to its ability to continue as a going concern, according to the filing.
The amended S-4 states that Trump’s company “expects to incur significant losses into the foreseeable future” and “may never generate sufficient operating revenues to achieve profitable operations.”
However, Trump Media’s management said it believes capital raised from the merger — if it ever closes — will be “sufficient” to retire debt and fund operations, according to the S-4.
Digital World and TMTG in late September entered into a third amendment to their merger agreement, which stipulated the filing of an amended Form S-4 by Nov. 14 and another round of due diligence. The S-4 was filed yesterday.
Digital World can still terminate the merger by Nov. 21 if the transaction does not pass the due diligence sniff test. Read more.
This article has been corrected to reflect the net loss of TMTG since inception, taking into account the changes in the fair value of its derivatives liabilities.
