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Trump's Boutique Social Media Site Has Lost $73 Million

A lot of Donald Trump's appeal is that he is a brilliant businessman who people can look up to. The civil trial in New York is all about how he made his money: by cheating, not by being brilliant. That is why he is so upset about the trial. But is he a brilliant businessman? Here's another data point. His boutique social media site has lost $73 million in less than 2 years. That's not Elon-Musk-level bad businessman. To achieve that level you have to lose about $40 billion in a year by buying something for $44 billion, mostly with borrowed money, then driving it into the ground so it is worth only $4 billion a year later.

This tidbit about Trump's boutique social media platform, Truth Social, comes from a filing from Digital World Acquisition Corp. This is a company that was formed with the goal of buying something valuable later on. What it decided to buy is Trump Media & Technology Group. Truth Social lost $50 million on sales of just $1.4 million in 2022 and another $23 million so far this year. The amended S-4 filing contains the sentence: "If TMTG is unable to complete its merger with DWAC and receive more funds, the company may not survive." In fact, absent more funds, neither of them will survive.

It is not known how much skin Trump personally has in the game. It may well be that he owns many shares in both companies but didn't actually invest much (or any) money in them, so bankruptcies would hurt only the investors, not himself. This is his usual method of operation. He might well own one or more "magic" shares that give him special rights but he could have gotten the magic share(s) for free, as a reward for allowing his hallowed name to be associated with the company.

Of course, if these companies go belly up and Truth Social shuts down, it does have consequences for Trump. First, he will lose his ability to address his supporters directly, unless he swallows his pride and goes back to Twitter (X). Second, can you imagine the lawsuits and negative publicity being associated with a couple of very high-profile bankruptcies? Especially if he is ordered to pay a fine of $250 million or $500 million to New York State for violating banking, insurance, and tax laws. His whole image could collapse in a week. Political cartoonists and late-night comics would have a field day. It would surely cost him some votes, and in a close election, even 1-2% in swing states could matter. (V)

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