Donald Trump’s social-media business generated just $2.3 million in sales in the first half of the year on its way to a loss, underscoring the nascent company’s struggles as it pushes to close a deal that would make it publicly traded.
Those are the findings from the first in-depth look at how Trump Media & Technology Group is faring almost three years after its founding.
The results were disclosed in a regulatory filing Monday evening by Digital World Acquisition Corp., the blank-check firm that’s been trying to merge with Trump Media since late 2021.
The filing marks a win for investors who have been betting the special-purpose acquisition company deal will close.
The merger could’ve been terminated if the SPAC didn’t file the financials by Tuesday.
The deal can still be canceled by either party through Nov. 21, though that seems less likely as the filing signaled Trump Media, whichoperates the Truth Social website, may run out of cash without the merger proceeds.
If that deadline clears, the two still need to get regulatory clearance and shareholder approval before a year-end target.
It “may be difficult to raise additional funds through traditional financing sources in the absence of material progress toward completing its merger with Digital World,” the filing said.
The filing also noted risks from the swirl of lawsuits against the former president and his majority control of Trump Media’s voting stock.
Operation risks included bot networks that could potentially disrupt Truth Social’s website.
Trump Media lost $7.6 million on its operations in the first half of the year and interest cost them nearly $23 million, an increase of more than 10 times from all of last year.
The company booked a $23.3 million loss from operations in 2022 on just $1.4 million in sales, though it recorded a $50.5 million profit after getting a boost from a change in the value related to its convertible notes.
The SPAC’s shares have been volatile since the merger was announced in October 2021, soaring as high as $175 before tumbling as low as $12.34 in March.
A derivative tied to the merger’s success has plunged to $5 from an October 2021 peak of $79.
The shares rose 5.3% to $15.98 in Tuesday’s session while the warrants rose 9.5% to $5.33.
The proposed deal has been a political lightning rod and remains the longest standing SPAC pact to not close after it was announced in October 2021.
It has been plagued by investigations from the Justice Department and the U.S. Securities and Exchange Commission.
Representatives for Miami-based Digital World didn’t immediately respond to email requests for comment.
A spokesman for Trump Media responded to requests with a posting on Truth Social that addressed some media coverage of the filing.
The company has been a favorite among retail traders since the planned merger was announced with hordes of investors posting on Truth Social and other social media platforms about the company.
The SPAC has extended a deadline to complete the deal five times to give it until September.