Truth Social, the social media platform founded by former President Trump, has experienced significant financial losses since its launch in early 2022. According to a securities filing by Digital World Acquisition Corp (DWAC), the company that plans to merge with Truth Social, the platform lost $31.6 million between 2022 and mid-2023.
In 2022, Truth Social reported a profit of $50.5 million, with net sales of $1.4 million. However, in the first half of 2023, the platform lost $23 million, with net sales of $2.3 million. These figures indicate a substantial decline in financial performance.
The filing also revealed that Trump Media & Technology Group (TMTG), Trump's media company that owns Truth Social, may struggle to survive unless it completes the merger with DWAC. TMTG believes that raising additional funds through traditional financing sources will be challenging without progress towards completing the merger. The company's independent registered public accounting firm has expressed doubts about TMTG's ability to continue as a going concern.
TMTG has also made cuts to its workforce, eliminating several positions in March after conducting a review of all departments. Despite these challenges, TMTG CEO Devin Nunes views the filing as a crucial milestone towards completing the proposed merger.
Truth Social was launched by Trump in October 2021 as an alternative to mainstream social media platforms from which he had been banned. The platform currently has around 861,000 monthly active users on iOS and Android, accounting for less than 1% of the user base on a platform like X.
It is worth noting that Biden's campaign recently announced its intention to launch an account on Truth Social. However, the platform's financial losses and relatively small user base raise questions about its long-term viability and ability to compete with established social media giants.
Overall, the financial struggles of Truth Social underscore the challenges faced by new entrants in the social media industry, particularly those seeking to challenge the dominance of established platforms. The future of Truth Social will likely depend on the success of its merger with DWAC and its ability to attract a larger user base and generate sustainable revenue.