It’s the beginning of the end times for Truth Social. TS is ready to take its place in the graveyard along with Trump Steaks, Trump Vodka, Trump University, and all the other eponymously named business failures in Donald Trump’s life. Truth Social hasn’t filed a recent earnings statement with the Securities Exchange Commission, which it is required to do, so now deadlines and conditions are being set up. If they can’t be met and complied with, ta ta Truth Social. Bye bye. Sayonara. Forbes:
In a May 18 filing, Digital World Acquisition, a special purpose acquisition company (SPAC) that signed a deal in 2021 to merge with Trump’s media company to take Truth Social public, reported to the Securities and Exchange Commission it had made accounting errors in its annual financial report for 2022.
The year-end report can “no longer be relied upon,” Digital World told regulators, and the company is now developing a remediation plan to address the “material weakness” in its “internal control over financial reporting,” per the filing.
This is the kiss of death. But it gets worse. Truth Social has not filed an earnings statement for Q1 and it has until July 24 to do that. If it misses that deadline it will be delisted from the stock exchange. Another kiss of death.
There are a couple of big deals here: One is whether preliminary merger discussions between Digital World and Trump Media violated federal securities laws. That’s being investigated by the SEC. The other investigation is looking at whether a group of early investors in Digital World — who were brought into the deal by Patrick Orlando (who got fired recently as the CEO) — engaged in improper trading.
Bottom line, the merger needs to be completed by either September or November, depending on which account you read, or Trump has to repay investors over $300 million.
If the merger with Digital World doesn’t go through, Trump will likely need to find a new source of income to fund his Twitter competitor, Truth Social. While Trump Media & Technology Group is estimated to be worth between $5 and $25 million, the former president made less than $200 in income from the firm, Trump reported to the Federal Election Committee in April.
Trump isn’t going to find another source of income. Not unless he pulls a real rabbit out of a hat. Maybe his Saudi buddies would come through with money to keep Truth Social on the internet? I don’t see how that’s possible. The real problem with Truth Social is that it was anticipated it would grow exponentially faster than it has grown. It was going to be a competitor for Twitter in a few years. At its present rate of growth it’s guestimated that Truth Social might be in the Twitter league in a few decades.
Truth Social is not a viable company. It’s going to go down in flames, and while Trump is running for reelection. I guess we’ll see him soon over on Twitter way, where else? And if his MAGA followers are expecting their investment to be repaid, lots a luck with that.