- A company seeking to merge with Truth Social cited Trump’s reputation as an “essential factor” to its financial success in an SEC filing.
- As Trump grapples with ongoing legal battles, Digital World says its financial base “could be severely damaged.”
- Truth Social is accused of withholding more than $1 million from the vendor in contractual payments.
The future of the former president’s 10-month-old social media platform, Truth Social, is uncertain as the app has suffered significant financial losses and is accused of undermining its sellers amid Donald Trump’s ongoing legal battles.
A proposed merger between Truth Media & Technology Group (TMTG), the business that created the Truth social platform, and special purpose acquisition company (SPAC) Digital World Acquisition Corporation has been postponed indefinitely while the Securities and Exchange Commission investigates the platform. Business relations.
SPACs, such as Digital World, are companies formed to raise funds through an initial public offering or to merge with an existing company. SPACs have no other business. In an SEC filing earlier this month, Digital World said its sole purpose was to prepare to take True’s social public “to date, it has not operated or generated any revenue.”
In another filing, Digital World asked for shareholder approval to delay the merger, scheduled for September 8, until next year, citing concerns that it could affect business operations under the former president’s name.
“If President Trump becomes less popular or there are further controversies that damage his credibility or people’s willingness to use platforms associated with him and receive financial benefits, TMTG’s results of operations and the resulting proposed business combination could be adversely affected,” the filing read.
Digital World’s stock has fallen more than 75 percent since its peak in March — from a high of $97.54 a share to $27.52 each — and in its latest SEC filing, the company reported a loss of $6.5 million in the first half of the year.
This week, Truth Social faced another setback, with its trademark application rejected on Thursday for being too similar to another social app called “Vero – Truth Social”.
Further elaborating on the social platform’s financial woes, Fox Business News reported on Thursday that Truth Social is in a bitter battle with its provider, RightForge, which has accused the hosting service of depriving it of $1.6 million in contractual payments.
Three people with direct knowledge of the matter told Fox Business News that Truth Social made only three payments to RightForge for its web hosting services and stopped making payments in March.
Other Trump businesses have faced similar payment battles, including contractors who say they haven’t been paid more than $2.98 million at the Trump International Hotel and contractors who say Trump stole a $100,000 piano. Unpaid bills at the Taj Mahal Casino Resort reached $90 million, and three liens were thrown out due to unpaid contractor payments of $5 million at the Trump DC hotel.
Trump’s companies have filed for bankruptcy at least six times – a fact Digital World cited in SEC filings, The Washington Post reported: “Several companies involved [Trump] filed for bankruptcy” and “there can be no proof of that [Trump’s media company] And it doesn’t go bankrupt.”
Representatives for Trump, TMTG, Truth Social and RightForge did not immediately respond to requests for comment from Insider.
