[Editor's Note: This article and headline have been corrected to state that Trump Media and Technology Group, the parent company of Truth Social, has lost $31.6 million since it was founded in 2021, according to an SEC filing. A previous version gave an incorrect figure for the total loss. This article has also been corrected to reflect that in 2022 TMTG had a profit — rather than a loss — of $50.5 million.]
Trump Media and Technology Group, the parent company of Truth Social, has lost $31.6 million between its founding in 2021 through the first half of this year, according to a new Securities and Exchange Commission filing from Digital World Acquisition Corp., or DWAC, the special purpose acquisition company that aims to take Trump Media and Technology Group public.
Truth Social is the alternative social media platform backed by former President Donald Trump, who posts on it several times a day.
According to the S-4 form DWAC filed with the SEC, Trump Media and Technology Group, or TMTG, lost $59.1 million in 2021, on $2.1 million in net sales. In 2022, the company made a profit of $50.5 million, on $1.4 million in net sales. In the first half of 2023, TMTG lost $23 million, on $2.3 million in net sales.
The disclosure of Truth Social's financial condition comes as Trump faces four separate criminal indictments while also leading the polls among the 2024 Republican presidential candidates.
DWAC said the potential merger has become an existential necessity for TMTG.
According to DWAC's filing, TMTG's negative cash flow and persistent losses have raised "substantial doubt" about the company's ability to continue operating in its current state. A merger with DWAC could provide sufficient capital to pay off TMTG's heavy debt load and keep operations going as cash flow falters, the filing said.
DWAC announced Monday it had submitted the S-4 form as the next step to proceed with the TMTG merger. TMTG CEO Devin Nunes called the move a "monumental milestone" in the pursuit of a merger.
"Truth Social aims to be more than a social media platform — we aspire to become the centerpiece of a movement, as well as a method for Americans to invest in their freedom," Nunes said in a statement.
If the merger does not happen, the DWAC filing warned, TMTG might be unable to "fully develop" Truth Social.
Truth Social was launched in February 2022 after Trump was banned from several mainstream social media sites such as Twitter and Facebook following the Jan. 6, 2021, storming of the U.S. Capitol carried out by many Trump supporters.
Given that origin story, Truth Social has branded itself as a safe haven from "Big Tech censorship," a vision that DWAC said must be realized if Truth Social is to maintain any sort of competitive advantage.
The filing pointed out that the new leadership of X, formerly known as Twitter, which was bought by Tesla CEO Elon Musk in October 2022, has put more of an emphasis on free speech, which could heighten competition for Truth Social's user base and threaten the success of the brand.
Trump returned to X in August, though he has said Truth Social is still his primary social media platform.
Trump's presence on Truth Social started as a boon for the company but has now become a crutch. The DWAC filing noted that if Trump stopped devoting "substantial time to Truth Social" or if he "fails to retain the public's interest," then TMTG would financially suffer even more.
But even the former president's loyalty to Truth Social may not be enough to keep the platform afloat on its own.
"TMTG may not be successful in its efforts to grow and monetize Truth Social," the filing said.