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A company seeking to merge with Truth Social cited Trump’s reputation as a “major factor” for his financial success in an SEC filing.
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As Trump grapples with ongoing legal battles, Digital World said his financial position “could be negatively impacted”.
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Truth Social is accused of paying a seller more than $1 million in contractually required payments.
The future of the former president’s 10-month-old social media platform, Truth Social, is on uncertain ground as the app suffers massive financial losses and is accused of failing its suppliers amid Donald Trump’s ongoing legal controversies. .
A planned merger between the Trump Media & Technology Group (TMTG), the company that created the Truth Social platform, and the Special Purpose Acquisition Company (SPAC) Digital World Acquisition Corp, has been postponed indefinitely because the Securities and Exchange Commission investigates the Business Transactions.
SPACs such as Digital World are companies created to raise funds through an IPO or to merge with an existing company. SPACs have no other commercial activities. In an SEC filing earlier this month, Digital World said it had “not conducted any operations nor generated any revenue to date,” as its sole purpose was to prepare to make Truth Social public.
In another filing, Digital World sought shareholder approval to postpone the merger, which was set to take place on September 8, until next year, citing concerns about the former president’s reputation potentially affecting business. .
“If President Trump becomes less popular or if there are further controversies that damage his credibility or people’s desire to use a platform associated with him, and from which he will benefit financially, TMTG’s business results and outcome will of the proposed business combination, may be adversely affected,” the request read.
Shares of Digital World have fallen more than 75 percent since its peak in March — from a high of $97.54 a share to $27.52 a share — and in a recent SEC filing, the company reported that it was in the lost $6.5 million in the first half of the year.
This week, Truth Social took another blow as its trademark application was rejected Thursday for being too similar to another social app called “Vero – True Social.”
Fox Business News, further highlighting the social platform’s financial problems, reported on Thursday that Truth Social is engaged in a bitter battle with its supplier, RightForge, and is accused of weighing down its hosting service with $1.6 million in contractually obligated payments. payments.
Three people with direct knowledge of the matter told Fox Business News that Truth Social made just three payments to RightForge for its web hosting services and stopped paying in March.
Other Trump companies have faced similar payment problems before, including contractors who claim they were left unpaid for more than $2.98 million after repairs at the Trump International Hotel and a small business owner who said Trump was paying him for it. $100,000 worth of pianos. Unpaid bills at the Taj Mahal Casino Resort totaled $90 million, while three liens were placed against Trump’s DC hotel after $5 million in contractor fees went unpaid.
Trump’s companies have filed for bankruptcy at least six times — a fact Digital World noted in SEC filings, The Washington Post reported, saying “a number of companies associated with [Trump] filed for bankruptcy” and that “there can be no assurances that” [Trump’s media company] won’t go bankrupt.”
Representatives from Trump, TMTG, Truth Social and RightForge did not immediately respond to Insider’s requests for comment.
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