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By Natalie Colarossi
Staff Writer
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The company purchasing Donald Trump's media network, Truth Social, warned investors on Monday that there might be a bankruptcy risk given the former president's history of failed business ventures.
A regulatory filing by Digital World Acquisition Corp. highlighted several examples of bankruptcy associated with Trump while noting that there is "no guarantee" Truth Social will be successful.
Digital World announced a merger with Trump Media and Technology Group (TMTG), which owns Truth Social, in October. The social media network was launched in February after the former president was barred from mainstream social media platforms in the aftermath of the January 6, 2021, riot at the U.S. Capitol.
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In Monday's filing, Digital World outlined the bankruptcies of several Trump ventures, including Trump Taj Mahal, Trump Plaza and Trump Castle in Atlantic City, as well as the failures of Trump University, Trump Vodka, Trump Steaks and GoTrump.com.
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"A number of companies that had license agreements with President Trump have failed. There can be no assurances that TMTG will not also fail," the filing states. "While all of the foregoing were in different businesses than TMTG, there can be no guarantee that TMTG's performance will exceed the performance of those entities."
Trump will maintain significant influence over TMTG, controlling roughly 47 to and 58 percent of the company and serving as its chairman, according to the filing. The agreement also states that Trump has pledged to post on Truth Social six hours before making similar posts on other platforms, in order to maximize exposure on the site. After that, Trump may post on any other social media platform he has access to.
In the first few months after its launch, Truth Social was largely deemed a disaster by users who reported that the site was overrun by bots and technical errors, while hundreds of thousands of people were put on waitlists to join. Trump and his family didn't even appear to be enthusiastic about the app in its early days. The former president remained largely silent on the platform until April, while some of his children have maintained a heavier presence on Twitter.
Truth Social has been criticized for having an interface that closely resembles Twitter, from which Trump has been suspended. However, Tesla CEO Elon Musk, who has had an offer accepted to buy Twitter for $44 billion, said he would reinstate Trump's account if the deal is complete.
In response to its rocky start, Truth Social announced last month that it would attempt to undergo "major capacity upgrades" to improve the "performance and reliability" of the app.
Newsweek reached out to TMTG for comment.
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