Truth Social: Trump's Failing Project?

Truth Social Faces Critical Financial Hurdles in 2023

by Zain ul Abedin
Truth Social: Trump's Failing Project?
© im Vondruska/Getty Images

In late 2021, former President Donald Trump launched Truth Social, a new social media platform, following his bans from major networks like Twitter and Facebook. Developed by Trump Media & Technology Group (TMTG), Truth Social aimed to rival the dominance of established social media giants.

Despite high expectations, the platform has encountered significant financial setbacks. A report by Reuters, based on a securities filing from Digital World Acquisition Corp (DWAC) - the special-purpose acquisition company set to merge with Truth Social - reveals that the platform has incurred substantial losses.

Since its inception, Truth Social has lost $31.6 million.

Financial Struggles Continue

The filing further discloses that while Truth Social generated $50.5 million in profits in 2022, its net sales were a mere $1.4 million.

The financial woes continued into 2023, with losses amounting to $23 million in the first half of the year, despite net sales of $2.3 million. The prospects of the company remain uncertain. DWAC's filing paints a grim picture of Truth Social's fiscal health, suggesting that acquiring additional funding through traditional means might prove challenging if the proposed merger does not proceed.

This financial strain was evident in March 2023 when Truth Social had to cut several jobs, hindering its growth potential and particularly impacting its streaming video-on-demand service.

Diminishing Value and Risks

Trump's initial vision for Truth Social to challenge tech behemoths like Facebook and Twitter seems increasingly unattainable.

The platform, once valued at $875 million, is now estimated to be worth between $5 and $25 million, a stark contrast from its valuation at the announcement of the DWAC merger. Moreover, Forbes notes that Trump's brand is closely tied to the fate of Truth Social.

The platform's success hinges heavily on his public reputation and popularity. Any decline in Trump's favorability could adversely affect the company's performance. In summary, Truth Social, once a hopeful contender in the social media landscape, now faces a precarious future, marred by financial losses, operational challenges, and dependence on the fluctuating popularity of its founder.

As it stands, the platform is far from realizing its ambition of rivaling industry giants, with its viability and sustainability in serious question.