The financial struggles of Truth Social, Donald Trump's social media venture, have been laid bare in a recent regulatory filing. Digital World Acquisition Corp, the special purpose acquisition company set to merge with Truth Social's parent company, Trump Media & Technology Group, disclosed the platform's financial woes in a filing with the Securities and Exchange Commission (SEC).
Since its inception, Truth Social has faced substantial losses, totaling $73 million, raising concerns about its sustainability. The filing outlines that the platform incurred a $50 million loss in 2022, followed by an additional $23 million in the first half of 2023, according to a Forbes report.
Launched in 2022 as a conservative-friendly alternative to major tech platforms, Truth Social aimed to attract advertisers looking to engage with Donald Trump's substantial following. However, the recent regulatory filing paints a different picture. Trump Media & Technology Group, the owner of Truth Social, reported only $2.3 million in sales through June this year, a stark contrast to the $73 million in losses.
The disclosure also includes a cautionary note from the accountants of Trump Media & Technology Group, expressing "substantial doubt about the company's ability to continue as a going concern."
This marks the first time that the financial details of Truth Social have been made public, revealing that despite Trump's endorsement, the platform has struggled to generate significant revenue for its parent company, TMTG. The combined net sales for Truth Social and TMTG since their launch amount to $3.7 million, which is an amount overshadowed by substantial losses.
Adding to the financial challenges is a complex balance sheet, influenced by a "change in fair value of derivative liabilities," unrelated to the day-to-day operations of the company. The filing underscores the hurdles faced by Truth Social in establishing itself as a competitive player in the social media landscape.
Initially positioned as an alternative to major tech giants like Facebook and Twitter (now X), Truth Social received a boost in May 2022 when Donald Trump committed to using it as his primary social media platform. However, the recent financial disclosure highlights the platform's struggle to translate Trump's endorsement into sustained revenue and success.
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