Home Tech Donald Trump represents a unique threat to Truth Social, says Truth Social

Donald Trump represents a unique threat to Truth Social, says Truth Social

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Donald Trump represents a unique threat to Truth Social, says Truth Social

Trump Media & Technology Group, the parent company of Truth Social, majority owned by former President Donald Trump, filed a document with the Securities and Exchange Commission this morning that helpfully details all the ways Trump himself poses a threat to the company. and its shareholders.

While the company generated just over $4 million in revenue in 2023, Trump Media’s valuation has fluctuated wildly since it went public in March, at one point reaching more than $7 billion. As of this morning, the company was valued at $3.7 billion. Trump Media has become a meme stock, where the share price is governed more by vibes than traditional financial performance.

He SEC document The filing by Trump Media this morning, which announced the public stock offering of 21.5 million shares, also details the company’s “risk factors.” These statements are standard for publicly traded companies and typically include everything from macroeconomic headwinds to worst-case scenarios such as earthquakes or terrorist attacks. The filing includes several risk factors not directly related to Trump, including competition from other social media companies, deficiencies in accounting and data privacy laws. And the company has faced multiple lawsuits from the company’s early employees, who argue that they deserve more action.

But an entire section is dedicated to the risks associated with Trump, making Truth Social’s risk factors unique because they present Trump’s role as prime mover and majority shareholder as a threat to the company’s success.

“TMTG may be subject to greater risks than typical social media platforms due to the focus of its offerings and the involvement of President Donald J. Trump,” the company said in the SEC filing. “These risks include active discouragement of users, harassment of advertisers or content providers, increased risk of piracy of the TMTG platform, reduced need for Truth Social if First Amendment speech is not suppressed, criticism to Truth Social for its moderation practices and an increase in shareholder lawsuits. .”

Here’s how Trump Media says Trump himself could threaten the company:

Trump’s legal problems

Trump Media noted that if Trump were to “discontinue his relationship with TMTG due to death, disability, criminal conviction, incarceration or any other reason, or limit his involvement with TMTG due to his ongoing candidacy for political office, TMTG would be at a significant disadvantage. .”

Trump’s bankruptcy history

“Entities associated with President Donald J. Trump have filed for bankruptcy in the past,” the company said in the filing, which noted that the Trump Taj Mahal, Trump Plaza, Trump Castle, the Plaza Hotel and Trump Entertainment Resorts , Inc. had previously filed for bankruptcy.

“While all of the above were performed in businesses other than those of TMTG, there can be no guarantee that TMTG’s performance will exceed the performance of those entities,” the document says.

Other companies refuse to work with Truth Social

“To date, several potential third-party partners have expressed an unwillingness or reluctance to work on TMTG’s products or provide services for reasons including TMTG’s connection to President Donald J. Trump,” the document states.

Trump’s use of other platforms

The company warned that if Trump stopped using Truth Social, its business would be negatively affected.

Trump has an agreement to post all content he deems “non-political” first on Truth Social, and must wait 6 hours before posting it on any website. But Trump, as a political candidate, can argue that everything he posts is political content, meaning the company doesn’t have much power if he wants to start tweeting again.

“Accordingly, TMTG may lack any meaningful solution if President Donald J. Trump minimizes his use of Truth Social,” the document states.

Politically motivated hackers

Trump’s involvement makes the company a prime target for hackers, according to the document.

“TMTG believes it is a particularly attractive target for such breaches and attacks, including by nation states and highly sophisticated, state-sponsored or well-funded actors,” the company said in the document. “And TMTG may experience increased risk from time to time as a result of geopolitical events.”

Trump’s self-interest

Trump, who owns 57.6 percent of Trump Media, could steer the company to his advantage in a way that might not align with other Trump Media investors.

“President Donald J. Trump, as a majority shareholder, will have the right to vote his shares in his own interest, which may not always be in the interest of TMTG shareholders generally,” the document says.

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