- A company seeking to merge with Truth Social cited Trump’s reputation as a “significant factor” in its financial success in a Filing with the SEC.
- As Trump faces ongoing legal battles, Digital World said his financial condition “could be adversely affected.”
- The social truth is accused to stiffen a supplier on more than $1 million in contractually obligated payments.
The future of the former president’s social media platform, Truth Social, is on uncertain ground as the app faces huge financial losses and is accused of short-circuiting its suppliers amid controversies. Donald Trump’s ongoing legal proceedings.
A planned merger between Trump Media & Technology Group (TMTG), the company that created the Truth Social platform, and special purpose acquisition company (SPAC) Digital World Acquisition Corp, has been postponed indefinitely as the Securities and Exchange Commission survey of platform business transactions.
SPACs like Digital World are companies created either to raise funds through an IPO or to merge with an existing company. The SPACs have no other business operations. In a Filing with the SEC earlier this month, Digital World said it had “neither entered into any transactions nor generated any revenue to date” as its sole purpose was to prepare to go public with Truth Social.
In other depositDigital World has sought shareholder approval to delay the merger, which is expected to take place on September 8, until next year, citing concerns that the former chairman’s reputation could impact business.
“If President Trump becomes less popular or if there are new controversies that damage his credibility or people’s desire to use a platform associated with him, and from which he will benefit financially, the results of operations of TMTG, as well as the outcome of the proposed business combination, could be adversely affected,” deposit Lily.
Digital World shares have plunged more than 75% since their peak in March – falling from a high of $97.54 per share to $27.52 each – and in a recent SEC filing the company said it lost $6.5 million in the first half of the year.
This week, Truth Social received another blow as its the trademark application has been refused Thursday for being too similar to another social app called “Vero – True Social”.
Shedding more light on the financial difficulties of the social platform, Fox Business News reported Thursday that Truth Social is locked in a bitter battle with its provider, RightForge, and is accused of holding the hosting service up to $1.6 million in contract payments.
Three people with direct knowledge of the case said Fox Business News that Truth Social only made three payments to RightForge for its web hosting services and stopped making payments in March.
Other Trump companies have faced similar payment battles before, including contractors who claim they were left behind. over $2.98 million outstanding after repairs to Trump International hotel and one small business owner who said Trump gave her $100,000 worth of pianos. Unpaid bills at the Taj Mahal Casino Resort amounted to 90 million dollarswhile three liens were placed against Trump’s DC hotel after $5 million in contractors’ fees have not been paid.
Trump companies have at least filed for bankruptcy six times – a fact Digital World noted in SEC filings, The Washington Post reportedsaying: “a number of companies that were associated with [Trump] have filed for bankruptcy” and that “there is no guarantee that [Trump’s media company] also won’t go bankrupt.”
Representatives for Trump, TMTG, Truth Social and RightForge did not immediately respond to Insider’s requests for comment.