Trump SPAC social media company appears to miss its first product deadline
- Former President Donald Trump's new social media company appears to have missed its own November deadline to launch an invitation-only beta version of "Truth Social," its purported alternative to Twitter.
- The share price of Digital World Acquisition Corp. — the SPAC company that plans to merge with Trump's social media firm — has dropped dramatically since it exploded when the deal was announced in late October.
- The November release date was the first clear test of whether the company could deliver on its promises to investors who bought stock in DWAC.
WASHINGTON – Former President Donald Trump's new social media company appears to have missed the November deadline it set to release an invitation-only beta version of "Truth Social," its purported alternative to Twitter.
There have been no official announcements of a beta launch, nor have there been any sightings or images of an operational platform online.
At the same time, the price of the stock of Digital World Acquisition Corp. – the SPAC company that plans to merge with Trump's social media firm – has dropped dramatically since its share price exploded when the deal was announced in late October.
Shares of DWAC, which had been trading as high as $175 per share right after the merger was disclosed, were trading at around $44 per share on Wednesday.
Late Wednesday afternoon, Reuters reported that Trump's new company is trying to raise up to $1 billion by selling shares to hedge funds and family offices at a price higher than its initial pre-merger valuation of $10 a share.
"Trump Media is now looking to secure a so-called private investment in public equity (PIPE) that would value Digital World shares closer to their recent price, currently hovering around $40," Reuters reported, citing anonymous sources.
The value of DWAC shares spiked during the final 10 minutes of trading Wednesday, jumping from $38.35 at 3:50 PM to a high of $51.02 just after 4:00 PM.
It is not unusual for tech companies to miss their own deadlines for product releases.
But the November launch date that Trump Media & Technology Group set for "Truth Social" was the first clear test of whether the company could deliver on its promises to investors who bought stock in DWAC.
Representatives of TMTG and DWAC did not immediately respond to questions about Truth Social from CNBC.
DWAC is a special purpose acquisition company, also known as a blank check company, which had an initial public offering in September that raised approximately $290 million.
On Oct. 20, DWAC announced that it plans to merge with Trump's newly created TMTG, in a deal that valued the resultant firm at up to $1.7 billion.
In its own announcement, Trump Media & Technology Group said it "will soon be launching a social network, named 'TRUTH Social.'"
"TRUTH Social is now available for PreOrder in the Apple App store. TRUTH Social plans to begin its Beta Launch for invited guests in November 2021," the announcement said. "A nationwide rollout is expected in the first quarter of 2022. Those who are interested in joining TRUTH Social may now visit www.truthsocial.com to sign up for the invite list."
But as of Wednesday, the Truth Social website was still just a landing site and a sign up form to be on the "waiting list."
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It is also unclear who is actually building the network.
An investor presentation created by TMTG does not disclose any companies working on the TRUTH Social platform, nor does it list any executives involved in the social media site.
The media relations officer for the company, Roma Daravi, has not tweeted about TMTG and Truth Social since October. Daravi did not respond to an inquiry from CNBC.
DWAC stock had been trading at around $10 before the deal was disclosed.
Between Oct. 21 and 23, more than 500 million shares of DWAC were traded, and the company was one of the most discussed companies on retail traders' discussion boards.
Owning shares of DWAC also became an emblem of political support for Trump. Several of the former president's most outspoken backers in Congress bought shares in the company.
But the frenzy of speculation quickly died out.
Within a week, the stock price began to fall, and has been on a steady decline ever since.
While Wednesday's close of $44.35 was more than four times the pre-deal trading price, people who bought DWAC shares at the height of the hype and held on to the stock would have seen most of their investment's value evaporate.
If Truth Social actually launches as promised, the network would provide a platform for Trump, who was banned from Facebook and Twitter following his incitement of the deadly Jan. 6 storming of the U.S. Capitol.
Without the ability to communicate directly with his followers online, Trump has been forced to rely on press releases and appearances on friendly cable news channels.
Twitter is not the only media platform Trump and his allies are trying to replicate on their own in order to promote the former president.
Trump's son Donald Trump Jr. and a partner also recently formed a publishing company, Winning Team Press, and published a coffee table book of photos from Trump's years in office.
Update: This story was updated to include the closing price of DWAC shares Wednesday.
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