Correction: This article has been updated to accurately reflect the losses reported by Truth Social. While the company reported a loss in the first half of 2023, it recorded a $50 million profit in 2022, not a loss. We regret the error.
Former President Donald Trump’s Truth Social platform lost almost $23 million in the first six months of 2023, according to a Monday Securities and Exchange Commission (SEC) filing.
The company, which Trump founded to be a free speech platform after Twitter banned him, made over $50 million in profit in 2022 but lost about $23 million in the first six months of 2023, according to the filing. Truth Social’s dependence on Trump’s engagement with the platform and competition from other free speech platforms could pose risks to its profitability, the filing asserts. (RELATED: ‘Broken Weirdo’: Trump Stirs Feud With Howard Stern On Truth Social)
“If Truth Social fails to develop and maintain followers or a sufficient audience, if adverse trends develop in the social media platforms generally, or if President Trump were to cease to be able to devote substantial time to Truth Social, [Trump Media and Technology Group’s (TMTG)] business would be adversely affected,” it states. “If President Trump fails to retain the public’s interest, or if the customer base were to cease using Truth Social, it could result in a write-down of TMTG’s capitalized development costs.”
Furthermore, billionaire Elon Musk’s ownership of X — formerly Twitter — and its free speech focus also pose a threat to Truth Social’s profitability, according to the SEC filing.
“In addition, there are a number of other social media platforms that focus on the same audience that Truth Social will focus on,” it states. “To the extent users prefer a platform that is not associated with President Trump, our ability to attract users may decrease. Additionally, as a private company under new ownership, X may demonstrate a sustained commitment to free speech principles that will heighten competition for users who prioritize such principles. Failure to attract a sufficient user base would adversely affect TMTG’s business prospects.”
Companies are required to include “major events” that shareholders should be informed about in these SEC filings. The filing also says Truth has potential for expansion due to its relationship with Trump and its distinction from more restrictive platforms, according to the filing.
President Joe Biden and Vice President Kamala Harris’ campaign joined Truth Social in October. The campaign had said in May that it would “absolutely not” join the platform, according to Axios.
TMTG reported over $50.5 million in profit in 2022 following a significant positive adjustment in the value of its “derivative liabilities,” according to the filing.
“I created TRUTH Social and TMTG to stand up to the tyranny of Big Tech. We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced,” Trump asserted in a press release in October 2021. “This is unacceptable.”
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