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With Trump’s Truth Social continuing to bleed money like a sieve and the impending merger of its parent entity, Trump Media and Technology Group (TMTG), with the SPAC Digital World (DWAC) complicated by a host of federal investigations, the headwinds for the former US President’s media-related ambitions appeared to be rapidly becoming insurmountable just a few weeks back. Now, however, the stars again seem to be aligning, and the consummation of this much-delayed merger agreement finally appears at hand.
To wit, Digital World has now filed the first amendment to its Form S-4, which is used to register securities with the SEC and includes details related to share distributions, exchange offers, and mergers. DWAC’s amendment has added a preliminary proxy statement and a prospectus to its Form S-4, indicating that the SPAC appears to be moving ahead with its planned merger with Trump Media and Technology Group, whose CEO Devin Nunes called this development “a monumental milestone toward completing the business combination.”
Bear in mind that, as per the third amendment to the merger agreement between Digital World and Trump Media and Technology Group agreed upon in September, the two entities had undertaken to perform another round of due diligence, retaining the option to withdraw from the proposed merger by the 21st of November should this renewed scrutiny fail to meet their respective objectives. In light of the just-filed amendments to DWAC’s Form S-4, it appears that the due diligence cleared the primary threshold for the financial viability of the merged entities.
Break: Former president Trump’s Truth Social has lost $73M since launching last year, and has brought in only $3.7M in net sales. https://t.co/RndlL2Gtme
— Alex Weprin (@alexweprin) November 13, 2023
Separately, Digital World has also filed its financial statements for the six months that ended on the 30th of June. The 10-Q filing revealed that Truth Social is a veritable sieve for cash resources. In 2022, the social media platform lost $50 million against revenue of just $1.4 million. In the first six months of 2023, Truth Social has lost $23 million in cash vs. inflows of just $2.3 million. Do note that the social media platform had targeted an audience of around 81 million by 2026. Currently, however, it can only boast of 6.5 million users.
For the benefit of those who might not be aware, TMTG’s Truth Social app uses a Soapbox frontend and a customized, open-source version of Mastodon at its backend. In December 2021, the platform tapped the online video platform Rumble to provide video hosting services.
Of course, Truth Social’s bleak financials have a direct bearing on Trump. After all, the former US President owns 90 percent of Trump Media and Technology Group. Back in April, news emerged that Trump had marked down the worth of his TMTG stake to between $5 million and $25 million. Initially, Digital World had valued TMTG at around $875 million.
Do you think Digital World and TMTG are finally about to consummate their merger agreement? Let us know your thoughts in the comments section below.
Update: Trump Media and Technology Group (TMTG) Rejects the Reporting on Its Finances
In a dramatic turn of events, Trump Media and Technology Group (TMTG) has denied the veracity of the media’s reporting on its finances, taking umbrage to the fact that it has lost $73 million since its inception. For further details, head over to this post.