Trump could earn $3 billion from his social media site Truth Social: The deal, its significance

As Trump owns 60% of TMTG, he stands to get $3 billion from the deal, which will double his wealth from the current $2.6 billion estimate by Forbes magazine in October 2023. However, it remains uncertain how quickly Trump will get access to the cash.

Here is a look at why the merger is crucial for Trump and what stops him from getting the money soon.

What is Truth Social?

Truth Social was launched in early 2022, soon after Trump was banned on Facebook and X (formerly known as Twitter) following his role in the January 6 US Capitol attack. The social media platform aimed to connect the former President with his support base.

Speaking to ABC News, Roxana Muenster, a doctoral student at Cornell University who studies the far-right and digital communication, said: “It is marketed in opposition to mainstream media apps, which Trump and his supporters allege discriminate against their views and limit free expression. Its content and audience are overwhelmingly conservative and made up of the MAGA base. There is also a lot of hate speech and extremism on the platform due to their lax approach to content moderation.”

Much like other right-leaning social media sites such as Gettr and Parler, Truth Social doesn’t have a large user base. According to research firm Similarweb, the platform had around 5 million active users, including mobile users and website visitors, as of February 2023, ABC News reported.

In comparison, TikTok had 2 billion and Facebook had more than 3 billion users. But when it comes to its rival in the alternative social-media space, Truth Social has a much wider user base. For instance, Gettr had less than 2 million visitors in February, the ABC News report said.

In terms of user interface, Truth Social seems like a clone of X. Users have a profile and they can follow each other. They post “truths” or “retruths” and can send direct messages. Advertisements are called “sponsored truths”.

Why is the merger crucial for Trump?

As Trump is facing a host of criminal and civil cases, his legal spending has dramatically shot up. A fundraising group — Save America PAC — run by him, spent more than $5.5 million just in February on legal fees, according to a report by Reuters.

“The spending marked an acceleration from the close to $3 million Save America reported spending on legal bills in January. The group, which raises money together with Trump’s election campaign but is legally separate, has now spent more than $55 million on legal bills since the start of 2023,” the report said.

Moreover, Trump has to pay a $454 million penalty by Monday in a civil fraud case, which accuses him of inflating the value of his real estate holdings in deals with banks.

Therefore, the merger of Digital World and TMTG has come at a critical time for Trump, who is supposed to receive $3 billion from the deal. The merger will also infuse TMTG, which has been financially struggling, with a vital $300 million.

“The social media company lost $10.6 million from its operations in the first nine months of 2023 on revenue of $3.4 million,” Reuters report said.

Why might Trump not receive cash quickly?

Although shares of TMTG could begin trading on the stock market as early as Monday, it is possible that Trump won’t be able to cash in on his stake for a while. Under the current agreement, Trump is barred from selling his shares in the company for at least six months or using them as collateral for loans.

This might soon change, though. Given Trump’s extensive control over TMTG, a majority of the company’s new board members are expected to be his allies. They could help him reach a deal, which would allow him to sell the shares or his stake earlier than six months.