Donald Trump’s Presence on Truth Social Threatens the Platform’s Future

Trump’s Involvement Poses Significant Risks to Truth Social’s Success

In a recent Securities and Exchange Commission filing, Trump Media & Technology Group (TMTG), the company behind the Truth Social platform, outlined various ways in which former President Donald J. Trump’s involvement could threaten the company’s success. The filing comes amidst a backdrop of declining valuation and legal disputes with early employees over share allocation.

Trump’s Role as Chief Promoter and Majority Shareholder

TMTG acknowledged that its focus on Trump-related offerings and his significant involvement in the company could expose it to greater risks compared to typical social media platforms. These risks include:

• Active discouragement of users and harassment of advertisers or content providers
• Increased risk of hacking attempts targeting TMTG’s platform
• Reduced need for Truth Social if First Amendment speech is not suppressed
• Criticism of Truth Social’s moderation practices
• Heightened likelihood of stockholder suits

Potential Threats Posed by Trump’s Personal Circumstances

The filing highlighted several aspects of Trump’s personal life that could adversely affect TMTG:

1. Legal Issues: If Trump were to discontinue his relationship with TMTG due to death, disability, criminal conviction, incarceration, or any other reason, or limit his involvement due to his ongoing candidacy for political office, TMTG would be significantly disadvantaged.
2. History of Bankruptcy: Entities associated with Trump have previously filed for bankruptcy protection, including the Trump Taj Mahal, Trump Plaza, the Trump Castle, the Plaza Hotel, and Trump Entertainment Resorts Inc. While these businesses differ from TMTG, there is no guarantee that TMTG’s performance will surpass that of those entities.
3. Reluctance of Third-Party Partners: Several potential third-party partners have expressed an unwillingness or reluctance to work on TMTG’s products or provide services due to the company’s connection with Trump.
4. Trump’s Use of Other Platforms: If Trump were to minimize his use of Truth Social in favor of other platforms, TMTG’s business would be adversely affected. Despite an agreement to post non-political content on Truth Social first, Trump, as a political candidate, may argue that all his posts are political, leaving TMTG with little recourse.

Heightened Security Risks and Potential Conflicts of Interest

TMTG believes that Trump’s involvement makes the company a particularly attractive target for breaches and attacks, including those from nation-states and highly sophisticated, state-sponsored, or well-funded actors. The risk may be heightened during times of geopolitical events.

Furthermore, as the controlling stockholder with a 57.6 percent stake in TMTG, Trump is entitled to vote his shares in his own interests, which may not always align with the interests of TMTG’s stockholders generally, potentially leading to conflicts of interest.

As Truth Social navigates these challenges, the company’s ability to mitigate the risks associated with Trump’s involvement will be crucial to its long-term success and stability.