Former President Donald Trump
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Since its launch in early 2022, former President Donald Trump’s Truth Social generated net sales of $3.7 million and lost $73 million.
The figures mark the first time internal financial details have been publicly disclosed on the social platform, and they suggest that while Trump has made Truth Social his primary social media platform, this has not translated into significant revenue for the tech startup, which is not the case but is owned by Trump Media & Technology Group (TMTG).
The numbers were revealed in a new financial release from TMTG’s SPAC merger partner, Digital World Acquisition Corp. The filing revealed that Truth Social lost $50 million in 2022 on just $1.4 million in net sales, and lost $2.3 million in the first six months of this year but lost $23 million U.S. dollar.
TMTG’s financial condition is such that “TMTG’s independent registered public accounting firm has advised that TMTG’s financial condition casts substantial doubt on its ability to continue as a going concern,” the filing states.
In a candid assessment of its business, the filing said: “As of June 30, 2023 and December 31, 2022, management has significant doubts that TMTG will have sufficient funds to pay its liabilities as they become due, including related liabilities with promissory notes.” notes previously issued by TMTG” and that “TMTG believes that it may be difficult to raise additional funds through traditional financing sources if significant progress is not made in completing the merger with Digital World.”
The filing indicates that TMTG may not survive if it is unable to complete the merger with DWAC and preserve the pot of money at stake.
While TMTG was valued at $875 million when the merger with DWAC was first announced, Trump revealed in his most recent financial disclosure form that his majority stake is worth between $5 million and $25 million.
The amended S-4 filing also outlined a number of updates and risk factors related to the company, including the fact that its long-planned streaming video service appears to be off the table for now. The filing makes no mention of the service (which was touted as featuring conservative comedy specials and “Trump-specific programming”) except in connection with layoffs.
“On March 1, 2023, TMTG eliminated several positions,” the filing states. “This action followed a review of all departments and had the greatest impact on TMTG’s streaming video on demand (SVOD) and infrastructure teams.”
Trump announced his technology and media company in late 2021, describing it as a competitor to major technology platforms such as Facebook and Twitter.
In May 2022, Trump agreed to make Truth Social his primary social platform and agreed not to post on other platforms until six hours after submitting a “truth.” However, since the initial signing of the contract with TMTG, Elon Musk acquired Twitter and restored Trump’s account (he also renamed it “X”).
According to Monday’s filings, Trump “verbally affirmed” on Oct. 30 that he would continue to honor that agreement at least until the merger was completed.
And the filing details a number of risks related to TMTG’s business and operations…but there is also an entire section entitled “Risks Related to Our Chairman President Donald J. Trump,” which discusses his ongoing legal challenges and the companies he owned that filed for bankruptcy (like his casino in Atlantic City) and the companies that licensed his name (like Trump Vodka and Trump Shuttle) that went out of business as a result.
“There can be no guarantee that TMTG will not fail,” the company warns.
There’s more to come.