Trump Media & Technology Group, the Truth Social parent company majority-owned by former president Donald Trump, filed a document with the Securities and Exchange Commission this morning that helpfully details all of the ways Trump himself poses a threat to the company and its shareholders.
While the company generated just over $4 million in revenue in 2023, Trump Media’s valuation has fluctuated wildly since going public in March, at one point reaching more than $7 billion. As of this morning, the company was valued at $3.7 billion. Trump Media has become a meme stock, where the stock price is governed more by vibes than traditional financial performance.
The SEC document filed by Trump Media this morning, which announced the public stock offering of 21.5 million shares, also detailed the company’s “risk factors.” These statements are standard for publicly traded companies, and usually include anything from macroeconomic headwinds to worst-case scenarios like earthquakes or terrorist attacks. The filing does include several risk factors that aren’t directly related to Trump, including competition from other social media companies, deficiencies in bookkeeping and accounting, and data privacy laws. And the company has faced multiple lawsuits from early employees of the company, who argue they deserve more shares.
But an entire section is dedicated to Trump-associated risks, making Truth Social’s risk factors unique because they cast Trump’s role as chief promoter and majority shareholder as a threat to the company’s success.
“TMTG may be subject to greater risks than typical social media platforms because of the focus of its offerings and the involvement of President Donald J. Trump,” the company said in the SEC filing. “These risks include active discouragement of users, harassment of advertisers or content providers, increased risk of hacking of TMTG’s platform, lesser need for Truth Social if First Amendment speech is not suppressed, criticism of Truth Social for its moderation practices, and increased stockholder suits.”
Here’s how Trump Media says Trump himself could threaten the company:
Trump’s Legal Issues
Trump Media noted that if Trump “were to discontinue his relationship with TMTG due to death, disability, criminal conviction, incarceration, or any other reason, or limit his involvement with TMTG due to his ongoing candidacy for political office, TMTG would be significantly disadvantaged.”
Trump’s History of Bankruptcy
“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, the Trump Castle, the Plaza Hotel, and Trump Entertainment Resorts, Inc had all previously filed for bankruptcy.
“While all of the foregoing were in different businesses than TMTG, there can be no guarantee that TMTG’s performance will exceed the performance of those entities,” the filing said.
Other Companies Refusing to Work With Truth Social
“To date, several potential third-party partners have expressed an unwillingness or reluctance to work on TMTG’s products or provide services for reasons including TMTG’s connection with President Donald J. Trump,” the filing stated.
Trump’s Use of Other Platforms
The company warned that if Trump stopped using Truth Social, its business would be adversely affected.
Trump has an agreement to post all content he deems as “non-political” to Truth Social first, and must wait 6 hours before posting it on any website. But Trump, as a political candidate, may be able to argue that anything he posts is political content, meaning the company doesn’t have much power if he wants to start tweeting again.
“Consequently, 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 makes the company a prime target for hackers, according to the filing.
“TMTG believes that it is a particularly attractive target for such breaches and attacks, including from nation states and highly sophisticated, state-sponsored, or otherwise well-funded actors,” the company said in the filing. “And TMTG may experience heightened risk from time to time as a result of geopolitical events.”
Trump’s Self-Interest
Trump, who owns 57.6 percent of Trump Media, could steer the company to his benefit in a way that might not align with other Trump Media investors.
“President Donald J. Trump will, as a controlling stockholder, be entitled to vote his shares in his own interests, which may not always be in the interests of TMTG’s stockholders generally,” the filing says.