Donald Trump’s Truth Social once offered a unique appeal: exclusive content from the 45th President himself. That advantage is now gone.
To boost his campaign, Trump has returned to Twitter – now renamed X – to reconnect with voters on the platform that helped him win the presidential election.
This change raises questions about the future of Trump Media and Technology Group (TMTG), the financially troubled parent company.
TMTG’s viability is closely linked to Trump’s political profile and his initials DJT, which also serve as the stock exchange’s ticker symbol.
The loss of exclusive content puts Truth Social at risk of becoming irrelevant in a crowded digital media market.
On Monday, TMTG shares hit a new all-time low, closing 3.6% lower at $22.24 since the SPAC merger in March.
This decline came before the end of a six-month lock-up period in late September, during which Trump could potentially sell his 79 million shares, representing 60% of the issued capital.
TMTG could not be reached by Assets for a comment.
Why is Trump back on X?
The decision to return to Twitter/X comes at a critical time as the 78-year-old is losing momentum against his younger rival Kamala Harris.
Given the neck-and-neck race and the fact that he has outsourced a local election campaign to donors to save money, he appears to be growing increasingly worried.
Are you better off now than when I was president?
Our economy is destroyed. Our borders have disappeared. We are a nation in decline.
Make the American Dream AFFORDABLE again. Make America SAFE again. Make America GREAT again!
– Donald J. Trump (@realDonaldTrump) 12 August 2024
Previously, Trump had only returned to X to post his mugshot after owner Elon Musk lifted the ban imposed by Twitter after Trump incited the violent riots at the Capitol on January 6.
Not even after surviving an attempt on his life did he return to post the photo showing him surrounded by secret service agents, his face covered in blood and his fist raised in the air.
But at that time, pollsters predicted a clear victory for him.
Trump can no longer afford to limit his influence to Truth Social, a company that refuses to disclose its own user numbers or the number of likely fake accounts run by bot farms.
In June, Trump joined ByteDance’s TikTok, a controversial move given his antagonistic relationship with China, where the parent company is based.
But TikTok is a video-sharing platform he is less familiar with.
His presence there is sporadic, his number of followers is only a fraction of X, and his viewership has declined due to the lack of fresh and exciting content.
On August 12, he celebrated his return to X ahead of a two-hour discussion with Musk and has been posting regularly since then.
The loss-making TMTG’s business is getting worse, not better
The future of Truth Social remains uncertain, as the company’s financial outlook was already bleak when Trump took exclusive use of the platform.
Parent company TMTG continues to be a financial burden, with daily operating costs for research and development, personnel and general expenses amounting to 73 times revenue. Excluding a non-cash impairment charge of $226 million, TMTG posted a net loss of $118 million on revenue of $1.6 million for the first six months.
The situation is worsening: TMTG’s operating loss in the first half of the year increased fifteenfold compared to the previous year and sales fell by 30 percent from 2.3 million dollars.
TMTG acknowledges its poor financials but claims its management is focused on improving features and usability rather than on key performance metrics. The company does not track or consider average revenue per user, ad impressions, pricing, or active user accounts in its business decisions.
“TMTG may choose to collect and disclose such measures if they are believed to significantly enhance investors’ understanding of TMTG’s financial condition, cash flows and other aspects of its financial performance,” the company said in a 10-Q filing filed earlier this month.
Finally, Colorado-based independent accounting firm BF Borgers was banned from practicing for life for copying and pasting audits and falsifying data. The SEC found that the firm had committed “massive fraud” in over 1,500 regulatory filings over a two-and-a-half-year period ending in June 2023.
One of his competitors, Barry Diller, chairman of the IAC Media Group, did not mince his words in early April: “This is a fraud. Just like everything he has ever been involved in.”
