Trump Media & Technology Group, the parent company of Truth Society majority-owned by former President Donald Trump, filed a document with the U.S. Securities and Exchange Commission this morning detailing Trump’s personal influence on the company and its shareholders All ways of threatening.
Although the company has revenue of just over $4 million in 2023, Trump Media’s valuation has fluctuated wildly since it went public in March, reaching more than $7 billion at one point. As of this morning, the company was valued at $3.7 billion. Trump Media has become a meme stock, with its stock price driven more by atmosphere than traditional financial performance.
Trump Media’s SEC filing this morning announcing the public offering of 21.5 million shares also detailed the company’s “risk factors.” These statements are standard for public companies and often include worst-case scenarios ranging from macroeconomic headwinds to earthquakes or terrorist attacks. The filing did include several risk factors not directly related to Trump, including competition from other social media companies, bookkeeping and accounting deficiencies and data privacy laws. The company also faces multiple lawsuits from early employees who believe they deserve more shares.
But an entire chapter is devoted to Trump-related risks, which makes Truth Social’s risk factors unique in that they view Trump’s role as chief sponsor and majority shareholder as a threat to the company’s success.
“TMTG may be subject to greater risks than typical social media platforms due to the focus of its products and involvement with President Donald J. Trump,” the company said in a filing with the Securities and Exchange Commission. “These risks Including active dissuasion by users, harassment by advertisers or content providers, increased risk of TMTG platforms being hacked, reduced demand for Truth Social if First Amendment speech is not suppressed, concerns about Truth Social’s moderation practices criticism and an increase in shareholder lawsuits.”
Trump Media says Trump himself may threaten the company as follows:
Trump’s legal problems
Trump Media noted that TMTG would be at a distinct disadvantage if Trump “terminates his relationship with TMTG due to death, disability, criminal conviction, incarceration or any other reason, or limits his relationship with TMTG due to his continued campaign for political office.” “.
Trump’s Bankruptcy History
“Entities associated with President Donald J. Trump have filed for bankruptcy protection in the past,” the company said in the filing, which noted that the Trump Taj Mahal, Trump Plaza, Trump Castle, Plaza Hotel and Trump Entertainment Resorts has previously filed for bankruptcy.
“Although all of the above entities are engaged in different businesses than TMTG, there can be no assurance that TMTG’s results will exceed those of these entities,” the filing said.
Other companies refusing to work with Truth Social
“To date, a number of potential third-party partners have expressed reluctance or reluctance to engage in TMTG’s products or provide services due to, among other reasons, TMTG’s relationship with President Donald J. Trump,” the filing states.
Trump’s use of other platforms
The company warned that if Trump stopped using Truth Social, its business would be adversely affected.
Trump agreed to post all content he deemed “non-political” to Truth Social first and had to wait six hours before posting it on any site. But as a political candidate, Trump is likely to argue that anything he posts is political, meaning the company doesn’t have much power if he wants to start tweeting again.
“As a result, TMTG may lack any meaningful remedy if President Donald J. Trump minimizes his use of Truth Social,” the filing states.
Politically motivated hackers
Trump’s involvement made the company a prime target for hackers, the documents said.
“TMTG believes it is a particularly attractive target for such breaches and attacks, including those from nation-states and highly sophisticated, state-sponsored or well-funded attackers,” the company said in the filing. TMTG may be exposed to increased risks from time to time due to geopolitical events.”
Trump’s self-interest
Trump, who owns 57.6% of Trump Media, may steer the company to his benefit in a way that may differ from other Trump Media investors.
“President Donald J. Trump, as the controlling shareholder, has the right to vote his shares in his own interest, which may not always be in the overall interest of TMTG shareholders,” the filing said.