Unusual warning
The biggest threat to Donald Trump’s Truth Social network is Donald Trump – says Truth Social
Donald Trump is Truth Social’s largest shareholder and most important user
© Frank Franklin II / AP / DPA
Truth Social just went public – and made Donald Trump billions richer. Now the network had to make its shareholders aware of its financial risks. The biggest one is, of all things, its most important user.
It is standard information for shareholders: What risks does the company see for its business? Donald Trump’s short message service Truth Social now has to answer this for the first time after going public at the end of March. Donald Trump is unlikely to like the answer.
According to the operating company Trump Media and Technology Group (TMTG for short), the ex-president and main shareholder is the greatest threat to the company in several respects. This emerges from documents filed by the company with the US financial regulator SEC on Monday. The main thing to blame is the close symbiosis: Donald Trump is Truth Social – and Truth Social is Donald Trump.
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Since the ex-president was banned from his favorite app Twitter, Truth Social has become his most important platform for attacking opponents, praising friends and also campaigning. Without a doubt, Trump is the most important reason to use the app in the first place. The operator also knows this.
“TMTG may face greater risks than typical social media platforms due to the focus of its offerings and the involvement of President Donald J. Trump,” the document explains. But it’s not just about possible attacks by hackers and the like. The operators openly admit that Trump’s behavior could have a direct impact on the success of the platform.
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Not with and not without Trump
And in several respects. If Trump were to be convicted in one of the numerous proceedings against him and no longer be able to use the service from prison, this could have fatal consequences for the use of Trutz Social, the document warns. “TMTG would be at a significant disadvantage.” The same applies to death, possible disability “or any other reason” by which Trump would limit or end his use of the platform.
But even if the president actively posts on the platform, he is a risk factor, the operators admit. “Several potential partners have refused to cooperate with TMTG because of Donald Trump’s involvement,” the document explains. The same applies to users: Trump could have a deterrent effect on many possible users of the platform.
But switching to other platforms could almost be worse. Donald Trump has committed to initially posting all non-political content exclusively on the platform and only posting it to competitors six hours later. But as a presidential candidate, he could argue that all of his posts are political, the operators fear. “If he subsequently shuts down the use of Truth Social, we have no serious legal recourse against it.”
Danger of bankruptcy
In addition to Trump’s active use of the platform, his financial behavior is also a risk, TMTG admits to Protocol. “Various companies associated with Donald Trump have had to file for bankruptcy in the past,” the document says – followed by a list of Trump bankruptcies such as the Trump Taj Mahal casino or the Plaza Hotel. It is therefore conceivable that TMTG is also threatened with this fate.
It should also be borne in mind that Trump’s interests do not necessarily correspond to those of other shareholders, the document warns. With 57.6 percent of the shares, he holds a majority of the shares. Unlike traditional shareholders, presidential candidate Trump does not necessarily have to have an eye on profits in order to benefit from the platform. “He is entitled to vote according to his own interests with his voting shares,” explains TMTG. “But that doesn’t have to correspond to the general interests of shareholders.”
Of course, Trump is not the only risk factor for the young company. Like other companies, TMTG cites possible competition, a faster increase in costs than revenues, a possible decline in demand for the stock and other market reasons or catastrophic scenarios. But the fact that the most important success factor and main owner of the company is declared a risk described in detail is almost unique.
Source:Risk report