Donald Trump's social network company warns investors of the risk of him being imprisoned | International

The warnings in the IPO prospectuses of American companies serve, among other things, to cover themselves against potential lawsuits from investors. They tend to contemplate all kinds of hypotheses about what could go wrong for the company. In the case of Digital World Acquisition, the special company that is in the process of merging with Trump Media & Technology Group (TMTG), owner of Truth, Donald Trump's social network, there is an entire chapter dedicated to the risk factors related to The ex-president. Among them, it is recalled that Trump's companies frequently end up bankrupt and they openly warn of the risk of him being “imprisoned.”

The hypothesis that Trump goes to jail has long ceased to be eccentric. He is accused in four cases in which he is accused of 91 crimes, all of which carry potential prison sentences. For the company's purposes, the risk is that Trump stops tweeting on Truth, his social network, thereby losing his audience and causing his already large losses to skyrocket.

“The death, incarceration or incapacity of President Trump, or the interruption or limitation of his relationship with TMTG, may adversely affect TMTG's business,” says one of the sections of the risk warnings. The company “depends greatly on the popularity and presence of President Trump,” who heads it and is its main shareholder. In addition, he continues, the magnate “has a significant influence on the business plan” of TMTG, so “President Trump's reputation and relationships are a critical element for the success of the business” of the company. “The future success of TMTG will depend, to a large extent, on the continued presence and popularity of President Trump,” the warnings section highlights. “If President Trump were to terminate his relationship with TMTG due to death, disability, criminal conviction, incarceration or any other reason, or limit his involvement (…) due to his current candidacy for political office,” the company “would be significantly affected by harmed,” he warns.

In theory, Trump can run for president of the United States from prison, and even win and serve in office. Of course, if prison officials don't let him tweet from there, that's bad for his business. Truth, Donald Trump's social network, has not managed to overshadow Facebook or Twitter in the slightest. Its main and almost only attraction is that Trump manifests himself through it. The former president is the most successful user, with 6.5 million followers. Still, that's a fraction of the 87.5 million he maintains in his dormant account on X, the social network formerly known as Twitter, where he was reinstated by decision of Elon Musk. The former president has a type of exclusivity contract with Truth's company, of which he is also its largest shareholder and president, by which his messages must be published generally on that social network at least six hours before any other . In practice, it is the only network he regularly uses.

The company recognizes that it needs to attract Republican voters to its network to be viable and admits that if Trump loses popularity or new controversies arise that damage its credibility or people's desire to use a platform associated with him, the results of operations They will resent it.

There are several warnings along the same line. In one of them, the company points out that Trump is the subject of numerous judicial proceedings, the scope and scale of which are unprecedented for a former president of the United States and current candidate in the Republican primaries for that office. “An adverse outcome in one or more of the ongoing legal proceedings involving President Trump could negatively impact TMTG and its Truth Social platform,” he says.

The IPO prospectus also reviews some of Trump's business precedents, at a time when he is being tried for fraud in a civil case in New York. The warnings would serve to scare away the most painted: “Several companies associated with President Trump have declared bankruptcy. “It cannot be assured that TMTG will not also go bankrupt,” says one. “Several companies that had licensing agreements with President Trump have failed. “There is no guarantee that TMTG will not fail as well,” she warns next. “A publicly traded entity controlled by President Trump has previously been the subject of a cease and desist order issued by the Securities and Exchange Commission,” it is also warned, in reference to the scandal involving Trump Hotels & Casino in 2002. Resorts, by attempting to mislead about the company's results.

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