The warnings in the IPO prospectuses of American companies serve, among other things, to protect themselves against possible lawsuits from investors. They tend to entertain all sorts of hypotheses about what could go wrong for the company. In the case of Digital World Acquisition, the specialized company that is in the process of merging with Trump Media & Technology Group (TMTG), owner of Truth, Donald Trump’s social network, there is an entire chapter dedicated to the risk factors associated with The is ex-president. Among them, it is recalled that Trump’s companies often go bankrupt, and they openly warn about the danger that he will be “jailed.”
The hypothesis that Trump goes to prison is no longer eccentric. He is charged with four counts of 91 crimes, all of which carry prison sentences. For the company’s purposes, the risk is that Trump stops tweeting on Truth, his social network, thereby losing his audience and increasing his already heavy losses.
“The death, imprisonment or incapacity of President Trump, or the interruption or curtailment of his relationship with TMTG, could adversely affect TMTG’s business,” one of the sections of the risk warnings states. The company “depends heavily on the popularity and presence of President Trump,” who runs it and is its majority shareholder. Furthermore, he continues, the tycoon has “significant influence over TMTG’s business plan,” so “President Trump’s reputation and relationships are a critical element in the company’s business success.” “TMTG’s future success will depend in large part on the continued presence and popularity of President Trump,” the warnings section emphasizes. “If President Trump were to terminate his relationship with TMTG due to death, disability, criminal conviction, incarceration or any other reason, or limit his involvement (…) due to his current candidacy for political office,” the company would be “significantly affected.” through damage,” he warns.
In theory, Trump can run for president of the United States from prison and even win and remain in office. Of course, if prison officials won’t let you tweet from there, it’s bad for your business. Truth, Donald Trump’s social network, hasn’t even managed to overshadow Facebook or Twitter. His greatest and almost only appeal is that Trump manifests himself through it. The former president is the most successful user with 6.5 million followers. Still, that’s just a fraction of the 87.5 million who have suspended their account on X, the social network formerly known as Twitter, where it was reinstated by Elon Musk’s decision. The former president has a kind of exclusive contract with Truth’s company, of which he is also the largest shareholder and president, according to which his messages must generally be published at least six hours before everyone else on this social network. In practice, it’s the only network you use regularly.
The company recognizes that it must attract Republican voters to its network to be viable and acknowledges that if Trump loses popularity or new controversies arise, the results of operations will damage its credibility or people’s desire to Using a platform connected to it can cause damage.
There are several warnings along the same lines. In one of them, the company points out that Trump is the subject of numerous legal proceedings, the scope and extent of which are unprecedented for a former President of the United States and current candidate in the Republican primaries for this office. “An adverse outcome in one or more of the ongoing legal proceedings against President Trump could negatively impact TMTG and its Truth Social platform,” it said.
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The IPO prospectus also addresses some of Trump’s business precedents, at a time when he is facing fraud charges in a civil case in New York. The warnings would serve to deter those most painted: “Several companies linked to President Trump have filed for bankruptcy. “There is no guarantee that TMTG won’t also go bankrupt,” says one. “Several companies that had licensing agreements with President Trump have failed. There can be no guarantee that TMTG will not also fail,” warns the following. “A publicly traded company controlled by President Trump was previously the subject of a cease-and-desist order from the Securities and Exchange Commission,” it also warns, referring to the 2002 Trump Hotels & Casino scandal. Resorts, from attempting to mislead the company’s results.
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