After being kicked out of Twitter, Trump founded his own social network.
(Photo: Reuters)
new York Difficult times for the former US President: The weak performance of the Republican candidates he supports in the midterm elections does not bode well for Donald Trump’s social media service “Truth Social”. Not only communication experts are convinced of this, but also more and more investors.
On Wednesday after the election, the stock of DWAC – Digital World Acquisition Corp – had lost around 20 percent of its value. At the start of the New York stock market on Thursday, it was down another five percent.
DWAC is the investment vehicle – a so-called SPAC (Special Purpose Acquisition Company) – that was actually committed to buying Trump’s “Media & Technology Group” (TMTG). But with the poor performance of candidates like TV doctor Mehmet Oz, Trump’s political future is looking less rosy at the moment. This could also reduce interest in his social network.
Trump founded Truth Media in response to his Twitter and Facebook evictions after the Capitol rush. His idea behind it: Like-minded people can exchange ideas on Truth – without having to fear the censorship of the politically left-leaning Silicon Valley.
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After a rocky start with software problems in February, “Truth Social” has meanwhile been able to win several million users. Ex-President Trump himself has almost four million followers – a far cry from the 88.7 million who used to follow him on Twitter.
>> Read also: Trump is the loser of the midterms – now his party could drop him
Because of the weak user numbers and the uncertain future, investors have been putting pressure on DWAC for several months. DWAC has also increasingly distanced itself from the planned deal in official documents. DWAC has already postponed the takeover several times.
According to an SEC document, “If President Trump becomes less popular or there are further controversies that damage his credibility or people’s desire to use a platform associated with him and financially beneficial to him, then operating results could by Trump’s Media & Technology Group.” This could also be the case if Trump’s political future is in jeopardy.
SEC investigations
In addition, investigations by the US Securities and Exchange Commission and the legal authorities could damage the business. They are investigating whether there was an agreement between Trump Media and the investment vehicle DWAC before the IPO.
That would not have been allowed under US company law. SPACs are only allowed to look for takeover targets after their IPO and must also inform their investors. They are a kind of shell that will only be filled later.
Fox Business, which is close to Trump, has reported that money is tight at TMTG in the past: According to this, the Trump company has not paid the conservative web hosting service RightForge since March and owes the company more than one million Dollar.
Trump could theoretically return to Twitter since Elon Musk took over the company. But Trump could harm his own medium by doing so.
In any case, investors are already sobered: DWAC stock is a little over $21 today, a far cry from the high of $97.4 in March.
More: Midterms have historically been considered a buy signal – will the trend continue this year?