Truth Social, the social networking site created by former President Donald Trump, has been in the spotlight following the Trump Media & Technology Group’s announcement of a significant financial loss. The company reported a substantial $400.9 million deficit last year, attributing the setback to its early development stage and a revenue-sharing agreement with an undisclosed advertising partner. The financial report also highlighted a 12% decline in annual revenue, now standing at $3.6 million.
Donald Trump launched Truth Social in response to his bans from Twitter and Facebook after the Capitol riot on January 6, 2021. The parent company, Trump Media & Technology Group, headquartered in Sarasota, Florida, has faced scrutiny over its financial performance and operational transparency. The company has not disclosed traditional key performance indicators such as sign-ups, daily or monthly user activity, or ad viewership for Truth Social.
In a strategic move last December, Trump transferred all his shares in the company, worth an estimated $4 billion on paper, to the Donald J. Trump Revocable Trust. Donald Trump Jr., as the sole trustee, now holds exclusive voting and investment authority over the trust's securities—a position that confers significant power over the company's future direction.
Earlier this year, Trump Media & Technology Group merged with Digital World Acquisition Corp., a shell company, in a special purpose acquisition company (SPAC) transaction. This merger allowed the company to become publicly traded quickly, offering a streamlined pathway for young companies seeking public investment. Trump's shares constituted over half of the company's stock, underscoring his substantial influence over its operations.
The company cited its nascent stage of development as a reason for not reporting specific performance metrics that are typically expected from established social media platforms. This lack of transparency raises questions among stakeholders about the platform's growth and sustainability.
