On Monday, former US President Donald Trump made his long-anticipated return to X (formerly Twitter), following a scheduled media chat with the platform’s owner, Elon Musk.
“Are you better off now than you were when I was president? Our economy is shattered. Our border has been erased. We’re a nation in decline. Make the American Dream AFFORDABLE again. Make America SAFE again. Make America GREAT Again!” Trump said in his first post following his return.
Musk, who recently made public his support for Trump and the GOP, announced earlier he would interview the 45th US president on Monday – marking his return since he was banned about two years ago. The interview is seen as another way Musk is supporting the Republican Party and Trump’s reelection bid, following his fallout with the Left.
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“In the past I voted Democrat, because they were (mostly) the kindness party. But they have become the party of division & hate, so I can no longer support them and will vote Republican,” Musk said.
The media chat termed a “live conversation” will take off at 8 p.m. Eastern Time and will be “unscripted with no limits on subject matter, so should be highly entertaining!” Musk said, soliciting X users to post their own questions.
However, X is not the only platform Trump is making a U-turn on. The former president has also signed up for the Chinese short-form video app TikTok, which he sought to ban in the United States during his presidency.
Trump’s return to X is expected to be a big boost to the platform, which has been grappling with a fallout with advertisers since it was purchased by Musk in late 2022. Also with his 88 million followers on X, Trump’s return is expected to bolster his reelection bid, helping him to reach a larger audience than in Truth Social.
Truth Social was created after Trump was banned across social media platforms for inciting the Capitol insurrection on Jan. 6, 2021, following his defeat at the polls by current President Joe Biden. However, Trump’s return to X is expected to spell doom for the struggling Truth Social, which he vowed earlier not to leave.
Truth Social Under Pressure
Truth Social is under Trump Media, which has reported a significant net loss of over $16 million for the latest financial quarter. This financial blow, paired with a sharp decline in revenue, adds to the growing concerns about the company’s sustainability and its ability to compete in an increasingly crowded digital media landscape.
The financial report, disclosed in a 10-Q filing, reveals that Trump Media’s revenue fell by 30% from the previous year, bringing in only $836,900 for the quarter ending June 30, 2024. This marks a stark contrast to the $1.2 million earned in the same quarter last year.
The decrease is largely attributed to a revised revenue-sharing agreement with one of the company’s advertising partners, a move intended to stabilize the company’s finances ahead of its merger with Digital World Acquisition Corp. However, this strategy appears to have backfired, further squeezing an already limited revenue stream.
Adding to the company’s financial strain are significant legal costs tied to the ongoing merger process, accounting for nearly half of the quarterly loss. Additionally, Trump Media has invested $3.1 million in IT consulting and software licensing to support its new TV streaming service, Truth+, which launched in August 2024.
While this investment is seen as a necessary step for future growth, it has contributed to the company’s current financial challenges.
Truth Social has been the cornerstone of Trump’s media strategy. However, its performance has been underwhelming, with user growth and engagement falling short of expectations. The platform, which was launched as an alternative to mainstream social media giants, has struggled to carve out a significant market share, and the latest financial results reflect these difficulties.
However, Trump’s return to X would likely draw many of his followers back to the more established platform, reducing engagement and traffic on Truth Social.
Stock Market Reaction
Investors have reacted to Trump Media’s financial troubles with concern, leading to a significant drop in the company’s stock price. Shares of Trump Media, which trade under the ticker DJT, closed at $24.88 on Monday.
Despite the drop, the company still maintains a market capitalization of nearly $5 billion, a valuation that appears increasingly difficult to justify given the modest revenue and ongoing losses.
Despite the setbacks, Trump Media insists it is well-positioned for the future, citing its strong balance sheet with $344 million in cash and no debt. The company is banking on the continued development of Truth+ and other digital ventures to turn the tide. However, with the looming possibility of Trump’s return to X and the persistent financial challenges, the road ahead looks uncertain.
However, as the 2024 presidential election approaches, any shift in Trump’s social media strategy, particularly a return to a more mainstream platform like X, could have significant repercussions for his company, potentially signaling the end of Truth Social as a viable competitor in the digital media space.