Why Donald Trump hasn’t returned to Twitter

Share on facebook
Share on linkedin
Share on twitter

Print

Image Source: Bloomberg

After Elon Musk lifted the permanent suspension of Donald Trump on Twitter, you might have thought that the former president would jump at the chance to come back. But so far, he hasn’t taken him up on that offer.

Why?

Well, Donald Trump is the only one who knows for sure the answer to that question.

But we know that tweeting could cost him a lot of money.

After Twitter banned Donald Trump, he founded Truth Social, a social media site that looks much like Twitter.

To understand Donald Trump’s financial situation, you need to know how Truth Social is set up as a business.

Last year, the private company that owns Truth Social, Trump Media & Technology Group (TMTG), said that it wanted to merge with Digital World Acquisition Corp, a shell company that trades on the stock exchange (DWAC).

A Special Purpose Acquisition Company, or DWAC, is what people call it (Spac). Spacs are used to speed up the process of going public, which can take a long time. It means combining a company that isn’t listed on a stock exchange with one that is.

TMTG and DWAC have agreed to join forces, but they are yet to finalize the deal.. But investors still put a lot of money into DWAC. They all bet that the deal will go through. The shell company is worth more than $800 million (£665 million).

A Spacs expert, Michael Ohlrogge, says that Mr. Trump’s newly merged company would be worth at least $3–4 billion, even though DWAC would only buy about a quarter of TMTG.

If everything works out, this will be one of the most successful business deals Donald Trump has ever made.

But the only way to keep the stock price high is to ensure that the former president stays on Truth Social.

Donald Trump is the key to Truth Social

Without Trump, it’s hard to see what Truth Social has going for it. He made the company for social media. Why should even his fans use the platform if he is posting elsewhere?

Truth Social already needs help getting people to use it. Similar Web, an analytics company, says that 8 million people went to the platform’s site in September 2022, down from 11.5 million in July. That’s not much for a social media company.

Similar Web thinks nine billion people went to Twitter’s site in September.

If Donald Trump stopped posting or did it elsewhere, he might tank the share price of DWAC, making it worth hundreds of millions of dollars less.

Donald Trump’s exclusive deal with Truth Social was so crucial to the planned merger with DWAC that they wrote it in the agreement.

If Donald Trump’s Tweets scares off investors, he could lose a lot of money and get sued.

It means that Trump is in a tough spot. He may want to recheck Twitter. But from a financial and legal point of view, he has a reason not to.

Other issues

However, other things are going on that could cause him to tweet again.

First of all, the share price of DWAC has been acting very strangely lately.

People have been buying DWA shares to invest in the former president himself, not just because it is a place where people can invest in Truth Social.

Klausner says that many people who have put money into DWAC are supporters of Mr. Trump.

It means that the price of DWAC shares goes up when Donald Trump’s luck gets better and down when it gets worse.

It went up on Monday, November 7, afterhe declared his intentions to run for office in 2024. But when he finally told everyone nine days later in a speech called “low energy,” the stock price went down.

Read Also: Donald Trump: Musk lifts ex-president’s ban on Twitter

The idea here is that, even though DWAC is merging with Truth Social, this lets Donald Trump put himself, or his brand, on the stock market. But, of course, if that’s the case, it would be fine if Mr. Trump stopped using Truth Social since the company is just a stand-in for him.