Truth Social Could Still Make Trump Billions — If He Wins

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As long as two major civil-court rulings hold up to appeal, Donald Trump is about to lose a lot of money. Last month, the former president was ordered to pay $83.3 million to E. Jean Carroll in a defamation suit. Later this month, the Trump Organization could pay up to $370 million in penalties for years of inflating his net worth and other acts of business fraud. The former president is still extremely asset rich, but the next year would be a great time for him to come into some easy money.

There’s a chance that such a windfall could come from an unlikely place: Truth Social.

The Truth Social story has followed a similar arc to many of Trump’s failed businesses over the years: media attention and value inflation in the early days, followed by legal woes, allegations of shady financing, and financial struggles. Truth Social may yet defy that pattern. But like Trump’s hopes for staying out of prison, its potential success probably relies on him winning the presidency again.

But that’s not all. For Trump to make a bunch of money off Truth Social, it would need to go public in a SPAC merger, a route that has failed so far, in large part because of an inquiry by the Securities and Exchange Commission into the accuracy of its disclosures to investors. In case you’ve forgotten, since it peaked in popularity around 2021, the process involves a real business combining with a shell company to go public without the scrutiny of an IPO. In this case, the shell company is called Digital World Acquisition Corp. and the real one is Truth Social’s parent company, Trump Media & Technology Group. (Neither responded to requests for comment.) SPACs do not have a high success rate, and tend to lose a lot of money for investors. The process has largely gone out of fashion and new regulations to protect investors make SPACs even less attractive to companies trying to get rich quick.

Trump’s SPAC deal has been stuck in limbo amid this general downward trend. In 2022, under SEC investigation and unable to rally shareholders, Digital World Acquisition Corp. missed its first deadline to go public, forcing it to return $1 billion in early investments. (The SEC eventually settled with the firm for misleading investors, resulting in an $18 million fine if the merger ever happens.) In 2023, in a separate inquiry, the Securities and Exchange Commission and federal prosecutors accused three of Trump’s partners of insider trading on the proposed merger. Truth Social user numbers remain extremely disappointing, and financial statements show that its parent company, Trump Media & Technology Group, is losing tens of millions in operating costs for every million they see in ad revenue. In an SEC filing from November, the company’s accountants wrote that they had “substantial doubts” about staying afloat. And as the merger deadline in September looms, there is no sign that they have gotten any closer to SEC approval of their financial disclosure to investors — a necessary step any SPAC needs to complete.

But hints of a potential Truth Social turnaround began at the Iowa caucuses in January. After Trump’s commanding win in the first primary state, stock in Digital World Acquisition Corp. surged by over 200 percent, suggesting that retail investors either view the social network as some kind of meme stock or, perhaps, see some genuine value in the company. “After the announcement of a SPAC merger, essentially all shares typically move into retail investors’ hands,” says Stanford Law professor and SPAC skeptic Michael Klausner. “This was true of Digital World Acquisition Corp. These people may think there is value in the merger, but I wouldn’t take a tip from them. I have no reason to believe they know anything.”

Any kind of comeback is contingent on what happens in November. “If he were to lose the election it would be really bad for the value of Truth Social,” says NYU law professor Michael Ohlrogge, another SPAC skeptic. After all, what value is there to a third-tier social-media company presided over by a two-time presidential loser? But if he were to win, not only could that valuation gain more momentum, it could give investors the confidence that the merger would actually happen. “It would take some time, but the president could appoint a majority of commissioners on the Securities and Exchange Commission and they could probably do one thing or another to make the merger go through,” says Ohlrogge. “That could be something that could be seen as useful.”

It is a long-shot prospect. SEC rules require SPACs to liquidate after three years, so Digital World would need to find a way to stay intact beyond the three-year mark in September. And there are bigger-picture problems: A merger would require competent management from a firm already associated with insider trading and fraud. It would also require a divisive politician winning the Electoral College with four criminal cases looming over him — though stranger things have happened, like Trump winning in the first place.

So how much money could Trump see from a successful Truth Social SPAC in the absolute best-case scenario? Parsing through Digital World’s latest SEC filing, Ohlrogge explains the numbers of a miraculous — and still very hypothetical — Truth Social windfall.

Trump owns 90 percent of Trump Media & Technology Group. At the current stock price of around $37.20, an estimated 135.7 million shares would be allocated to TMTG stockholders in the post-merger company, equaling about $5 billion. As the holder of 90 percent of that stock, Trump could receive $4.5 billion, which is close to double his current estimated net worth. “Would the stock price actually stay that high for very long post-merger?” Ohlrogge asked. “Especially if and when Trump started trying to unload some of those 135 million shares he owns? I myself find that rather doubtful. But, it’s clearly an area of some uncertainty.”

As with other Trump properties, it is hard to parse out what Truth Social is really worth. Two years ago, Trump Media & Technology Group was Trump’s most valuable asset on paper, with his shares in the company valued at $730 million on paper; that value was crucial in Trump’s return to the Forbes list of 400 most wealthy people on the planet. But Ohlrogge notes that SPACs often inflate values to make up for the high cost of going public that way. “There’s real concern here that Trump’s media company is inflating its valuation,” he says. Trump’s accountant also feels this way. In his disclosure with the Federal Election Commission last year, Trump valued his Truth Social holdings at somewhere between $5 million and $25 million — far short of the billion-dollar haul he could hypothetically gain from a merger.

The fact that Trump could still wring money out of his lackluster social network helps answer a common question: Why won’t he return to X? He was once quite fond of the app formerly known as Twitter; anyone who has used Truth Social knows that he basically ripped it off. And even though X has an increasing number of flaws, its audience of estimated monthly users is orders of magnitude larger than Truth Social — 500 million compared to around 600,000.

There appear to be some petty reasons for Trump’s refusal to return. With X’s diminished standing, Trump doesn’t really need it anymore — combative missives on Truth Social generally find their way into the news. He is constitutionally not a guy who likes to come crawling back; his party has gotten him quite used to being the one who is crawled to. It also looks like Trump has not resolved his spat from two years ago with X owner Elon Musk, in which he called Twitter “worthless” and made fun of Musk’s reliance on federal backing for Tesla and SpaceX. “I could have said ‘drop to your knees and beg,’ and he would have done it,” Trump wrote on Truth Social, describing a conversation in which he claimed Musk asked for government support for a project.

But there is also a contractual reason for Trump’s fidelity to Truth Social. An SEC filing from January states that Trump is obligated to post first on Truth Social six hours before bringing that content anywhere else — a clause that will continue “in perpetuity” as long as Truth Social is around. Though Trump is not known for adhering to contracts, there is a compelling reason to do so here. Any value left in the app would plummet if he went back to X. The dream of getting even richer just by posting would end.

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