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As bad as 2023 has been for former President Donald Trump, things are about to get worse. As Trump’s legal problems continue to pile up, the situation with his social media venture is also going south. Truth Social just reported that it has lost $73 million since launching in February 2022. Of course, it has been a long time since things looked good for Digital World Acquisition (NASDAQ:DWAC), the blank-check partner of Trump Media and Technology Group ( ). But now, the future looks even more uncertain as DWAC stock hangs in the balance and investors ponder an important question: Is this the end of Truth Social?
In short, no one knows yet. But it certainly seems like it. The past few months have been nothing if not volatile for DWAC stock. Special purpose acquisition companies (SPACs) are only as strong as the companies they merge with and, in this case, Digital World seems to have hitched its wagon to the wrong horse. Lacking both stability and growth, this troubled stock may finally be at the end of its rope.
The Tragedy of DWAC Stock Continues
Ever since Truth Social launched, it has become increasingly clear that simply being linked to Trump can’t make DWAC stock a winner. Between the regulatory probes, declining user statistics and general economic trends working against it, it has been hard to keep track of all the problems associated with this stock. However, no news has been quite as severe as the company reporting such significant losses. According to filings, Truth Social has lost nearly $23 million in just the first half of 2023.
With its financial status looking dire, it’s not hard to see why the social media platform may be on the verge of shutting down. DWAC stock has been facing a highly uncertain future for months, struggling to complete its merger with TMTG, Truth Social’s parent company. Last month, speculation even rose that Trump would terminate the deal.
Now that TMTG’s management has released this new information, it’s more clear than ever that Truth Social is struggling significantly. Citing the filing, CNN reports that the company has “negative cash flows and recurring losses from operations that raise substantial doubt about its ability to continue as a going concern.”
The End of the Line?
That should be enough to convince anyone that DWAC stock is on its way out. Still, investors should note that experts are also quickly souring on the company. Matthew Tuttle, a SPAC expert and the CEO of Tuttle Capital Management, once told InvestorPlace that Trump had “made SPACs great again.” Now, though, he speculates that TMTG “may be circling the drain.” If that’s true, DWAC stock will likely follow close behind.
Most people we’re probably not surprised to learn just how poorly Truth Social is doing. But now that investors know just how much it is struggling, it will be harder than ever to bet on shares of DWAC. Short sellers, on the other hand, could easily see the dying stock as a tempting way to capitalize on Trump’s troubles. One way or another, signs point toward Truth Social going the way of Trump’s other failed business ventures.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.