Truth Social could provide Trump with infusion of cash -- but critics are concerned about its content
The new app will be the first product of the Trump Media and Technology Group.
Truth Social, the social media app announced Wednesday by former President Donald Trump, could provide the former president with a substantial infusion of cash -- but critics also warn that it could create a new platform for the spread of misinformation.
The app will be the first product of Trump's new company, Trump Media and Technology Group, which is merging with the Nasdaq-listed Digital World Acquisition Group to form a publicly traded company, the former president announced.
The announcement comes at a time of turmoil for Trump's family business, with multiple branches of the Trump Organization currently under criminal investigation, sources previously told ABC News. On Wednesday, it was reported that the Westchester, New York, district attorney's office has had an ongoing criminal investigation into the Trump Organization's Westchester golf course; in July, the Manhattan DA charged the Trump Organization and its longtime CFO, Allen Weisselberg, with tax fraud; and New York Attorney General Letitia James has been conducting a parallel probe into Trump's business dealings.
Trump has denied all wrongdoing in the investigations, calling James' investigation and the investigation into his Westchester golf course a "witch hunt."
Trump also has millions in loans coming due early next year from one of his biggest creditors, Deutsche Bank. As of last year, Trump's company owed the Frankfurt-based bank an estimated $340 million, according to filings to the U.S. Office of Government Ethics in July of 2020.
The Trump Organization is also reportedly in "advanced talks" to sell the Trump International Hotel in Washington, D.C, which lost $71 million while Trump was in office, according to newly released federal documents.
Digital World Acquisition Group is a SPAC, or special acquisition company, also referred to as a blank-check company, which is usually a company established by a group of investors with a large sum of cash on hand seeking an investment opportunity. They are essentially shell companies that are created to facilitate a merger with companies that want to go public on stock exchanges like the Nasdaq.
If the newly announced merger is completed, Trump's company would have access to the nearly $300 million in cash raised by Digital World Acquisition. On Friday, Digital World Acquisition jumped more than 180% in Nasdaq trading before being halted due to volatility as shares surged for a second straight day. Previously, the stock surged more than 350% after the merger with Trump Media and Technology Group was announced.
The chairman and CEO of Digital World Acquisition, Patrick F. Orlando, is a Wall Street veteran who previously worked at numerous investment banks, including Deutsche Bank, until 2003. Orlando, who formed his own investment bank, Benessere Capital, is also CEO of Yunhong International, which is itself a blank-check company incorporated in the Cayman Islands with headquarters in Wuhan, China, according to Bloomberg.
Digital World Acquisition, which was incorporated in Miami in December 2020 shortly after Trump lost the 2020 election, also has ties to Brazil, as its chief financial officer, Luis Orleans-Braganza, is a current member of Brazil's National Congress and supporter of the country's far right president, Jair Bolsonaro.
Trump is no stranger to leveraging his celebrity name in the business world, with business offerings ranging from the hit TV show "The Apprentice" to now-defunct ventures like Trump University, Trump Steaks, and Trump Vodka.
"He is a marketer, he is always looking for ways to monetize," said David Richard, a social media expert and professor at Emerson College. "He can monetize his followers and I think that's exactly what he is doing."
Trump has remained banned from most major social media platforms, including Twitter and Facebook, since the aftermath of the Jan. 6 attack on the U.S. Capitol, with companies citing fears that he could incite further violence. Trump has long credited Twitter and social media for helping fuel his 2016 presidential victory, and in launching his own social platform the former president is hoping to regain his enormous social media following as he looks toward the 2022 midterm elections and a possible run for the White House in 2024.
With Truth Social, Trump will enter an already-crowded market of right-wing social media alternatives that promise users a space for "free speech," including Parler, Gab, and even Gettr, which was launched by the former president's longtime aide Jason Miller just a few months ago.
Trump, in his announcement Wednesday, said he created Truth Social "to stand up to the tyranny of Big Tech." But the former president, who used social media to spread falsehoods about the 2020 election, is drawing criticism from some social media experts who say Truth Social will likely become a "magnet for disinformation," spreading only "Trump's truth."
"Donald Trump's campaign and his brand has always been about creating a truth that benefits him," said Richard. "If it's the Trump algorithm, the opposition and dissenting voices are not going to pop up in the feed. Trump will always come first. It doesn't matter what information you want, you will always get what Trump says at the top of the feed."
A representative for Trump Media and Technology Group did not respond to ABC News' request for comment about the new platform, and former President Trump's office declined to comment.
Alexander Reid Ross, a fellow with the Centre for Analysis of the Radical Right, told ABC News that while he believes Truth Social won't grow enough to replace top social media platforms like Twitter, it will probably become a gathering place for extremists who could "turn it into something more focused and deliberately violent."
"I think the thing about a lot of these sites is that since they're built solely on voicing frustrations and anger, the engagement is pretty limited," Ross said. "Obviously, calling it Truth Social sort of lays out a path of hard-core trolling, gaslighting, and assorted reactionary tactics that we're used to seeing from the Trump camp."
"Trump's political existence is fueled by impulsive emotional responses to easy narratives that don't match the complexities of modern life," added Ross. "So there is absolutely no reason to believe that a social media site built around his personality will involve modest inquiry based on scientific curiosity using rigorous research."
Experts also told ABC News that Truth Social could end up having a similar outcome to Trump's previous online venture.
Earlier this year, Trump shut down "From the Desk of Donald J. Trump," a website where the former president posted statements after he was banned from Facebook and Twitter, after only about a month of operation.
"Trump does not have a great track record of launching online platforms in his post-presidency," said Vivian Schiller, executive director of nonprofit Aspen Institute. "His last attempt, which he called a platform but was in fact a blog, petered out after a matter of weeks."
On the other hand, said Richard, "Trump knows how to create controversy and he knows how to say things that rile people up," which Richard said will make it easier for the platform to attract subscribers.
Schiller told ABC News that "the bar is nearly insurmountable" for the site to become an alternative to Facebook or Twitter because the site will likely appeal to mostly Trump supporters who "may grow bored if there's no one to spar with."
"That said -- and this is important -- Trump has defied expectations before, so we shall see," Schiller said.