Donald Trump says he’ll ‘probably’ pursue a third presidential run. He dropped the rather definitive hint at a rally last week. In response, shares of the shell company Digital World Acquisition Corp. tied to Truth Social meaningfully increased in value for the first time in months. At market open on Monday, DWAC’s value instantly climbed about 25%, before falling slightly.
Referencing running for president, Trump said he would “very, very, very probably do it again,” at an Iowa rally on Nov 3. Then two days later, while Campaigning for Dr. Oz and Doug Mastriano in Pennsylvania, he again hinted at a coming, big announcement. An official declaration of a third presidential run could come as soon as Nov 14, according to a report from Axios.
Before this rapid-fire succession of 2024 presidential bid allusions though, DWAC and Truth Social were not doing well. DWAC launched as a publicly traded company last year, with the intent of acquiring and funding Truth and the broader Trump-affiliated media company, Trump Media & Technology Group (TMTG). Through the acquisition, the media group and social platform would be sheltered from many of the transparency and reporting disclosures necessary to get a company on the stock market.
Yet shortly after the intended merger between DWAC and TMTG was announced, the SEC, Department of Justice, and a federal grand jury in the Southern District of New York launched investigations into the deal. The investigations are each broadly concerned with the timing of merger discussions, relative to when the deal was announced and when Digital Worlds went public. Under federal regulations, companies aren’t allowed to discuss such acquisitions prior to an initial public offering.
The ongoing investigations put the merger on hold, and left Truth Social unable to access the funds locked up in DWAC. In August, Digital World filed a proposal to extend the merger deal deadline by one year, to September 2023. To approve such an extension, 65% of all company shareholders need to vote yes. However, the necessary affirmative votes are apparently not there, and the deadline for the final vote has been extended six times since it was originally set, most recently on Thursday. The delayed shareholder vote is now set for Nov 22. If the merger extension isn’t successfully passed at the point, DWAC will liquidate on Dec 8, and Truth Social’s future becomes unclear.
And still, it’s unlikely that Monday’s share jump alone will be enough to keep DWAC and Truth afloat. Despite Trump’s claims that his social media platform is doing better than its much larger competitors (i.e. Twitter and TikTok), Truth only has about 1.7 million monthly unique visitors in the U.S., versus Twitter’s 184 million monthly U.S. visitors, according to a report from the Washington Post.
And as Elon Musk’s chaotic Twitter takeover continues, it’s possible that Trump will be allowed back on his former, favorite platform—driving down Truth Social’s value even more. Though Trump has claimed he will not leave Truth for Twitter, there are clauses in his contract with TMTG that specifically allow the former president to post elsewhere.
In order to get that non-exclusive leeway, Trump’s family and legal representatives reportedly had to get involved—preventing the 76-year-old billionaire from signing an all-encompassing licensing agreement with the Truth Social founders, according to the Washington Post. Yet, even with the opportunity to move to greener pastures written into the official contract, Trump might feel stuck anyway.
He has reportedly told his confidants that he can’t abandon Truth because he knows he’s the single thing propping the site up. Trump doesn’t want a brand and platform so closely tied with him to publicly fail, according to the Post, which cited “people familiar with his thinking.” And the DWAC stock spike proves that, on this point, Trump is probably correct. Truth Social’s value is inevitably tied to how central Trump is in politics. If he runs for president again and becomes the main character of U.S. elections for another 2+ years, then Truth Social could be around to stay.