The future of Donald Trump’s Truth Social platform has been thrown into financial purgatory as a company created to help take the ex-president’s social media site public battles with financial regulators and is cited for deceiving investors.
Mr Trump first announced plans to transform his Truth Social enterprise into a publicly-traded company in late 2021. But the effort has stalled time and time again, thanks to near-constant issues including the firing of its former CEO and the arrest of a board member on insider trading allegations.
Now, The Washington Post reports that the transformation faces a key hurdle in the upcoming weeks: a vote by shareholders of the special purpose acquisition company (SPAC) created to take Truth Social public. That vote will determine whether the acquisition company, Digital World, continues the acquisition effort or instead winds down all business and shutters operations.
Normally, such votes are mere formalities and pass with little drama. But Digital World’s situation is unique simply due to the sheer number of investors — roughly 400,000 — with financial stakes in the matter, making the 65 per cent threshold required to continue the acquisition a rather steep hurdle.
In a statement to the Post, Digital World shrugged off the suggestion that the merger’s future was in question. A spokesperson for the Trump Media & Technology Group issued a statement haranguing the Post for its coverage of the company, while not identifying specific inaccuracies in the piece. The Trump team has largely blamed the SEC for supposedly slowing down the merger process.
“Having repeatedly defamed [the company] with false accusations that it still hasn’t retracted, The Washington Post adds to its heaping pile of bias with this new collection of defamatory and self-refuting falsehoods, proving once again why it’s a terrible mistake for anyone to believe a word they read in this publication,” the spokesperson complained.
But there’s clearly an urgency being displayed by Digital World’s executives as the deadline approaches for the shareholders to cast their votes on 8 September. A press release blasted out by the company just last month warned in all-caps that “every vote is needed to avoid liquidation” and asks shareholders “urgently” to do so.
“As our loyal stockholders know, a vote for the Extension is a vote for freedom of speech and a vote for innovation and growth,” current Digital World CEO Eric Swider said in the news release.
And Digital World’s own dustups with the SEC definitely shoulder some of the blame for the delays. The company settled with the agency in July, with the SEC finding that Digital World had made “ material misrepresentations in forms filed with the SEC as part of DWAC’s initial public offering and proposed merger with Trump Media & Technology Group”.
Should the merger go through, it will now be accompanied by an $18m fine, thanks to that settlement.
Website traffic watchdogs have reported that growth on Mr Trump’s Truth Social platform occurred this year largely in the immediate aftermath of his four criminal indictments; it has slowed overall, and continues to be eclipsed by mainstream outlets like Twitter and Facebook while largely competing for users with platforms that cater specifically to the right wing, like Gab and Rumble.
Mr Trump himself faces more than 90 felony counts as a wave of prosecutions that began when he left office evolved this year into tangible criminal cases. The ex-president is charged with a series of crimes related to his efforts to change the 2020 election results as well as his alleged mishandling of classified material and a hush money scheme involving a porn star.
He has denied guilt in all cases.