A total of $73 million has been lost to date since by Truth Social, a social platform, launched by former US President, Donald J. Trump, a new filling by Securities and Exchange Commission has revealed.
Truth Social was launched in February 2022.
According to a report by MediaPost, the filing was by Digital World Acquisition Corp. (DWAC), the SPAC that is supposed to merge with the platform’s owner, Trump Media & Technology Group (TMTG).
In addition to financial struggles, the filing, an amended S-4 proxy statement to DWAC stockholders for the proposed merger, notes having received more demands for information from the SEC. The agency’s investigations of the proposed transaction have been among the factors delaying its moving forward.
This October, following withdrawal of $467 million in commitments to the merger by some investors, DWAC returned a remaining $533 million of $1 billion raised to finance the venture, but indicated that it would continue to pursue the merger, asserting that TMTG’s reduced need for capital was a positive development.
The new filing states that Truth Social lost $50 million on $1.4 million in net sales in 2022 and another $23 million, on $2.3 million in net sales, in this year’s first half. It also states that after a review of all departments, the company eliminated several positions in March, significantly impacting the platform’s streaming and infrastructure teams.
It says that TMTG’s “independent registered accounting firm” has indicated that the company’s financial condition “raises substantial doubt as to its ability to continue as a going concern” and that 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.”
It also acknowledges that the factors that could adversely affect Truth social’s business include if Trump “were to cease to be able to devote substantial time to Truth Social — though it does not spell out whether this is meant to caution about Trump’s legal troubles or his run for president in 2024, or both.
In January, Rolling Stone reported that Trump had told several people that he did not want to renew a clause that requires that he first post any comments on Truth Social and wait six hours before posting them elsewhere. The new filing states that on Oct. 31, Trump “verbally affirmed” that he would abide by the clause at least until the merger is complete.
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