Trump Social Network Faces Looming Deadline: The fate of Truth Social, former President Donald Trump’s alternative to Twitter, hangs in the balance as the parent company, Trump Media & Technology Group, faces a critical shareholder vote this week. The vote could determine whether Trump’s media startup goes public after over a year of delays and regulatory scrutiny.
The merger between Trump Media & Technology Group and special-purpose acquisition company Digital World Acquisition must either close or extend its deadline before September 8. If not, Digital World will be required to liquidate and return the $300 million it raised to its shareholders. At least 65% of Digital World’s 400,000 shareholders must cast their votes by September 8 to decide whether to extend the deadline for another year or let the merger expire.
This vote extension is common in the SPAC (special-purpose acquisition company) sphere, and Digital World has already extended the deadline multiple times. If the vote passes, it will be the fifth extension of the Trump Media deal.
However, there’s a challenge: many of Digital World’s shareholders, who are small-time retail investors, may not be paying attention to the vote. Some shareholders likely bought shares out of loyalty to Trump and may not be aware that the deal is at risk. Despite this, the CEO of Digital World, Eric Swider, is working to raise awareness and has stated that a “vote for the Extension is a vote for freedom of speech.”
If Digital World is forced to liquidate, Trump Media’s future is uncertain. Trump owns a 90% stake in the company and would retain this stake if the merger fell through. The history of Trump Media’s journey to go public has been tumultuous.
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When the plan was first announced, shares of Trump Media & Technology Group soared 550% in one week. The stock peaked at $175 per share but has since fallen by 33.9% in the last year. The company is currently trading at $16.51 per share, with a market cap of $614 million.
The merger between Trump Media and Digital World Acquisition Corp. was announced in October 2021. Trump Media positioned itself as a vehicle for Trump’s return to social media after he was banned from Twitter in the aftermath of the January 6 riot. The company also mentioned plans to launch a paid streaming service. Initially, the plan was well-received by investors, but the merger has been plagued with problems and delays.
The Securities and Exchange Commission (SEC) investigated Digital World and imposed a civil penalty of $18 million for violating security laws. Trump Media also sued the Washington Post for $3.8 billion, claiming that an article about the proposed merger falsely accused the company of securities fraud.
As the critical shareholder vote approaches, the future of Truth Social and Trump Media hangs in the balance. The outcome of the vote will determine whether the media startup goes public or if the deal falls through, potentially leading to the liquidation of Digital World. With only a few days left until the vote, the future direction of Truth Social remains uncertain.
Our Reader’s Queries
Is Truth Social making any money?
Despite recording a net profit of $50.5 million due to a change in value linked to its convertible notes, the company reported an operating loss of $23.3 million in 2022.
How many users does Truth Social have 2023?
Truth Social is a social networking service that requires registration to access. With an estimated 607,000 monthly users as of July 2023, it is a popular platform for connecting with others online. As a user, you can create a profile and interact with other members of the community. Truth Social is a great way to stay connected with friends and family, as well as meet new people who share your interests. So why not join the growing community of Truth Social users today?
How many people are watching Truth Social?
Truth Social has approximately 2 million active users, which is significantly lower than Twitter’s 450 million monthly active users and Facebook’s 2.91 billion. Despite this, Truth Social is steadily gaining popularity among users who value a platform that prioritizes free speech and transparency.
What is the valuation of Truth Social?
The estimated value of TMTG, as per Trump’s financial disclosures to the Federal Election Commission, ranges from $5 to $25 million. This is a significant drop from the initial valuation of $875 million when the social media company merged with DWAC through SPAC.