Failed, one-term, twice-impeached former president Donald Trump’s fledgling social media site, Truth Social, appears to be headed for a quick demise, much like nearly every business venture the Donald has attempted over the course of his life.
According to Reuters, major investors are now withdrawing millions of dollars in financing.
Some investors are backing out of Digital World Acquisition Corp’s (DWAC.O) plan to acquire former U.S. President Donald Trump’s social media firm Truth Social, the blank-check firm said on Friday.
Digital World said it had received termination notices from private investment in public equity (PIPE) investors ending nearly $139 million in investments out of the $1 billion commitment it had previously announced.
That move by some investors could lead to a complete collapse of the deal, which would mean Truth Social no longer has any operating capital. That would lead to the death of the site.
More investors could pull out in the next few weeks, sources said, as they can terminate anytime after the deadline. Many are waiting for DWAC to propose more preferred terms to PIPE investors, sources added.
Truth Social was created by Trump because he was permanently banned from both Twitter and Facebook. The plan was to serve as an alternative to those sites, but Truth Social has suffered numerous setbacks since it first launched.
The biggest problem for Truth Social, however, has been a lack of interest by potential users. So far, the site only has approximately 550,000 active daily users. In contrast, Twitter has 217 million.
Just last month, it was reported that Truth Social was unable to pay its bills, including for the server which hosts the site:
There are signs that the company’s financial base has begun to erode. The Trump company stopped paying RightForge, a conservative web-hosting service, in March and now owes it more than $1 million, according to Fox Business, which first reported the dispute.
The company also has struggled with some basics of corporate operation. The U.S. Patent and Trademark Office this month denied its application to trademark “Truth Social,” citing the “likelihood of confusion” to other similarly named companies, including an app, “VERO — True Social,” first released in 2015.
