Trump faces a choice between money or influence

Trump faces a choice between money or influence

So far, Trump has insisted on staying on Trump Media’s Truth social platform. He has some contractual obligations with Truth Social — he’s required to make his posts exclusive to the platform for at least six hours before sharing them on another site — but there are carve-outs for political messaging and fundraising.


With only about four million followers on Truth Social compared to the 88 million he had on Twitter before he was booted from that platform on January 8 last year after his followers invaded the Capitol, the problems would be of reach and Trump’s visibility increased after he announced last week that he would run for the US presidency again in 2024.

Truth Social has just over 500,000 active daily users and less than 2 million monthly users. Twitter has – or at least had – more than 200 million daily active users.

Twitter’s ranking of numbers reflects the maelstrom that has engulfed the platform since Elon Musk took control late last month. Musk, who paid $44 billion to acquire Twitter, has laid off more than half of its 7,500 employees and about 1,200 more resigned or were forced to leave last week.

There’s a big question mark over whether Twitter can continue to operate with just a third of the staff it once had, with advertisers, who provided about 90 percent of its revenue, pulling out amid fears that Musk’s downsizing and commitment to the Freedom of Speech This could see the site flooded with offensive and racist posts and worse.

Twitter users are fleeing as they predict the demise of a company that is losing money and must now service the $13 billion in debt Musk took on as part of funding his bid.

Assuming Twitter survives (which is no certainty, given Musk’s erratic, eccentric, and flawed performance in his first few weeks as its owner), it remains a far larger and more influential channel with a far more diverse audience for Trump than Truth Social, this is an echo chamber for hardcore Trumpists.

If he is serious about improving the presidency, Trump will be tempted to regain the limelight he once enjoyed, where Twitter was his preferred platform for getting his messages and thoughts out and provoking his critics.

Truth Social itself would have a very limited future if it lost Trump or had to share its posts with Twitter. He is her most important asset.

It is revealing that DWAC’s stock price has fluctuated with perceptions of Trump’s political destiny. She fell heavily after the FBI raided Mar-a-Lago looking for classified documents. It fell again after the unimpressive performance of Republicans in the midterms, and particularly those who supported Trump. The price then rose when Trump announced he would run for the presidency again.

There is therefore a clear correlation between the perception of Trump’s political destiny and the stock market valuation of DWAC and therefore Trump Media.

Trump’s myriad legal troubles surrounding his own Trump Organization, the documents he kept in Mar-a-Lago, the Jan. 6 events in the capital, and his efforts to unvote the 2020 election pose a threat for the execution and value of The DWA Deal.

So are investigations by the US Securities and Exchange Commission (SEC) and the Department of Justice ahead of the announcement of the proposed merger of DWAC and Trump Media. SPACs must not have specific acquisitions in mind or have agreed upon when raising funds. This is a rule designed to ensure the structure cannot be used to circumvent the onerous disclosure rules and investor protections afforded by traditional public offerings.

There were talks between DWAC’s sponsors and Trump long before the deal was announced. DWAC said they weren’t material, but a whistleblower claimed they were far broader and more detailed and violated SEC regulations.

US authorities are also investigating the suspicious trading in DWAC stock before announcing the transaction.

Until the investigation is completed, presumably to the satisfaction of DWAC, there is significant uncertainty as to whether the merger will be allowed to be consumed regardless of the shareholders’ decision. That could explain why some of the hedge funds that pledged the additional $1 billion to the deal have backed out.

The situation is, as might be expected given the involvement of Trump, Musk and federal agencies, a chaotic and moving saga with significant dollars at stake for all parties and their fates hanging on uncertain outcomes.

Of course, if the merger of DWAC and Trump Media didn’t happen and Trump couldn’t get his hands on the money in the SPAC, it would be almost a foregone conclusion that Trump would return to Twitter unless he could find someone else around his Funding ambitions as a media owner.

Whether this would help or hinder Musk in his quest for financial stability for Twitter (and his own finances) is an open question.

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