Truth Social: Trump’s social media venture prepares to go public amidst challenges

NEW YORK: Former United States (US) President Donald Trump is venturing back into the stock market with his social media platform “Truth Social” set to go public on New York Stock Exchange (NYSE) following approval from shareholders of Digital World Acquisition Corp.

The merger is valued at nearly $3 billion. However, Trump will still hold the majority of the shares.
The social media platform faces multiple challenges, including financial struggles and a smaller user base compared to competitors.

Despite boasting 8.9 million sign-up accounts, the platform’s revenue remains at a meager $3.3 million, with losses totaling $49 million in the first nine months of 2023 alone.

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Analysts have questioned the sustainability of the entity’s valuation that reportedly exceed $3 billion. They expressed scepticism about Truth Social’s ability to translate its user base into profitable revenue streams.

The approval of going public has caused mixed reactions, with some investors optimistic about Trump’s media venture while others expressed concerns about its long-term viability.

Experts say Truth Social’s success depended on its ability to attract advertisers and expand its user base. The social media platform currently has approximately 5 million active members as of this article. Critics suggested that the platform’s focus on Trump’s personality and conservative views might limit its appeal to a broader audience.

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Additionally, Truth Social will face regulatory and legal risks, including the possibility of bankruptcy. Trump already has a sketchy history with some of his previous business ventures having ended in bankruptcy. This has added a level of uncertainty to his latest venture.

There are also concerns regarding potential conflicts of interest and corporate governance issues due to Trump’s controlling stake in the merged entity. With a $464 million fraud judgment looming, there were questions about Trump’s ability to cover legal liabilities using his stock holdings.

Experts claim the success of Truth Social will remain uncertain for now amidst Trump’s legal battles and competition in the social media landscape.