Trump’s Truth Social finds itself under a cloud of ‘substantial doubt’ due to financial setbacks. A recent filing reveals that the media start-up, backed by the former president, grapples with negative cash flows and recurring operational losses, sparking serious questions about its ongoing viability.
Financial analysts express grave concerns regarding the trajectory of Trump Media and Technology Group (TMTG) and its potential partner, Digital World Acquisition Group. Both Truth Social’s parent company, owned by Donald Trump, and the intended merger partner have received unsettling signals from their accounting firms, casting doubts on their ability to navigate financial challenges.
In a recent government filing dated November 13, Digital World Acquisition Corp, the publicly traded firm set to merge with Trump’s venture, discloses concerning “going concern” notifications.
The much-anticipated merger faces obstacles as government investigations delve into potential securities law breaches by Digital World. Going public in September 2021, Digital World announced plans to merge with Trump Media and Technology Group, the proprietor of Truth Social—an emerging contender against the former Twitter, now rebranded as X.
The disclosure accentuates the mounting uncertainties surrounding this merger. Digital World’s filing underscores the risks linked with Trump Media, stating that “TMTG’s independent registered public accounting firm has signalled substantial doubts about its ability to function as an ongoing business.”
Echoing these concerns, Trump Media’s accounting firm, BF Borgers CPA PC based in Colorado, raises apprehensions about the venture’s financial sustainability.
Both entities grapple with financial setbacks, with Trump Media reporting a $22.8 million loss for the quarter ended June 30, compared to a $77.1 million profit in the corresponding period last year. TMTG’s 12-month performance until December 2022 reveals a profit of $50.5 million versus a loss of $59.1 million in 2021.
Digital World reports a $9.1 million loss for the quarter ended June 30, 2023, a significant increase from the $3.1 million loss in the same quarter last year, primarily due to a $10 million hit tied to a regulatory settlement. Over the six months, Digital World recorded a $7.8 million loss, surpassing the $6.3 million loss from the previous year.
The path forward presents formidable challenges for both Trump Media and Technology Group and Digital World Acquisition Group, casting shadows over the anticipated success of their merger.
Also read: “Proceed to Trial” in Trump’s New York Hush-Money Case, DA Remarks Alvin Bragg
