Less than two years after it launched, Donald Trump’s social media site, Truth Social, might be headed for the internet graveyard. New federal filings show that its owner, Trump Media and Technology Group, like a lot of Trump businesses, has lost a massive amount of money (tens of millions of dollars, in this case) and is drifting, slowly, toward insolvency. The site’s business partners seem worried it won’t recoup its losses anytime soon.
Correction: An original version of this story incorrectly stated that Truth Social had lost $73 million since its launch. The business has actually suffered an operating loss since the start of 2021 of $35 million. It has also incurred interest expense of $25.3 million. We regret the error.
The embarrassing financial news was laid bare in a Securities and Exchange Commission filing made this week by Digital World Acquisition Corp (DWAC), the shell company behind a flailing attempt to take the social media business public. It states that the company has suffered an operating loss of $35.1 million since it was founded in 2021. Additionally, the company has incurred $25.3 million in net interest expense. Revenue for the six months ended June 30, 2023 was only $2.3 million.
It’s certainly a bad look for a business that always seemed somewhat shady and more than a little dysfunctional. Worse still, the site’s financial woes seems to portend dark things for an upcoming business deal that, should it fail to materialize, could threaten the very existence of the platform.
For months, DWAC, a special purpose acquisition company, has been trying to finalize a merger with Trump Media & Technology (TMTG), the company that owns Truth Social, with the ambition of taking the business public via a SPAC deal. The hope here is that taking the company public and introducing it to the stock market could help the platform grow via more diverse investments. However, since the merger plans were announced last year, they’ve been plagued by regulatory investigations and financial troubles. In its recent filing, DWAC worries that if the merger between itself and TMTG fails to go through, Truth Social might not survive much longer. The filing states:
“As of June 30, 2023, and December 31, 2022, management has substantial doubt that TMTG will have sufficient funds to meet its liabilities as they fall due, including liabilities related to promissory notes previously issued by TMTG...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.”
If Truth Social were to wither and die in this fashion, it would seem a fitting end to a platform that has already suffered a predictably ridiculous life cycle.
That life cycle began in February of 2022, a little over a year after Trump was banned from some of the internet’s most popular websites—including Facebook and Twitter—over his alleged role in revving up the January 6th crowd that later stormed the nation’s capital in a flagrant display of violent idiocy. Blacklisted by the mainstream web, Trump set about launching his own social site, which the former POTUS promised would be a haven for “free speech.”
After its launch, Truth Social immediately suffered setbacks. It was accused of improperly ripping off code from Mastodon, the open-source Fediverse site. It suffered numerous UX issues, like long wait lists, registration issues, and other technical foibles that made it difficult for users to navigate. And it navigated a number of financial and regulatory hurdles as it sought to establish itself as a place where MAGA crowds would want to assemble digitally.
Ironically, despite Trump’s promises of a censorship-free environment, a study published last September showed that Truth Social’s content moderation strategy was decidedly more aggressive than other, competitor sites. From this, one could easily draw the conclusion that the site has functioned less as a safe haven for users’ speech than for Trump’s, as the billionaire has perpetually used the site to launch unhinged verbal attacks on his political and legal enemies—ones that likely would have been “censored” at other sites.
Trump’s Truth woes are just a part of a compounding financial and legal shitstorm that the former President is currently undergoing. The subject of four active court cases, Trump finds himself in potential financial peril as a result. On top of everything, he is running for President again because, screw it, why not? That’s probably the only way to dig himself out of the hole he’s in and, after all, it worked out so well for everybody the first time around.