Will Trump’s Meme-SPAC Cash Grab Hurt His 2024 Odds?

Donald Trump
Photo by Michael Zarrilli/Getty Images
Tina Nguyen
November 2, 2021

For the past 10 months, I’ve been transfixed by how the banishment of Donald Trump from social media has affected his political salience and what he might do to reclaim the spotlight. Trump may not have been the first American politician to fully recognize the power of Twitter and Facebook to dominate media coverage, but he sure was the first to leverage it ad infinitum. So surely he would plot some way back to the fore, I assumed, if not only for political purposes then for measures of, well, rhetorical self-satisfaction. And if not for those, at least as a business opportunity. Trump is a guy who ran for president largely to use the office as a marketing platform, and barring an unforeseen act of enlightenment, he would presumably want to maximize the financial upside from short-burst social media micro-aggressions. 

In the course of my past reporting, sources close to Trump often predicted two possible outcomes. One: Trump would acquire or partner with a lesser social media company and rebrand it in his likeness, similar to how he built his business portfolio—certainly the core real estate business, but also the peripheral cologne, vodka, and tie shingles. Or, second: he would endeavor to build his own media company from scratch, from the tech stack to the actual product itself. 

Naturally, the former seemed more likely. Trump has a long history of slapping his name on chintzy and sometimes stomach-churning products, from discontinued Trump Steaks to the discredited Trump University, in order to secure short-term profits. And given the extraordinary operational and engineering challenges in launching a social media company from scratch, the true start-up option seemed like a fantasy. So I was not entirely surprised, earlier this month, when Trump announced that his Trump Media & Technology Group (TMTG) would go public via a merger with Digital World Acquisition Corp., a publicly-listed shell company. TMTG’s forthcoming app, a Twitter knock-off called Truth Social, appears to be cobbled together from the open-source software Mastodon, in violation of its license agreement. “This thing is strung together like a 12 year old’s firework program for Fourth of July,” a former Trump senior adviser recently told me, barely concealing his laughter. “Hopefully after you light it, someone doesn’t get shot and killed.”

I was caught off guard, however, by how transparently the TMTG-DWAC merger appears to function as a cash grab. While TMTG is mostly vaporware—plans for a streaming video service and cloud-computing platform to compete with Netflix and Amazon are indeed laughable—the money is real. Within hours of the merger announcement, a horde of amateur traders, Trump fans, and meme stock-loving Redditors began buying stock in the shell company, driving the price from $10 to nearly $100. The price has since settled around $62, with a market capitalization of more than $2 billion. Notably, while the exact size of Trump’s stock grant is unclear, the latest S.E.C. filing reveals a provision that would allow him to maintain his ownership if he decides to run for president—or if he is “convicted of a felony criminal offense.” 

Additional provisions stipulate that, once the deal closes, and if the stock remains high, the owners of Trump Media and Technology Group are entitled to additional shares worth billions of dollars. As my colleague William D. Cohan recently wrote, “TMTG could turn out to be the most meme-y meme stock of all time.” Or, as the former senior advisor put it: “It’s got as much gas as the Hindenburg.”

Whether Trump’s media company ever releases a working product, let alone generates a profit, is a mystery even to close Trump sources. The Truth Social app, which is only available for “pre-order,” has already been criticized for basic security issues that would leave users vulnerable. It is also facing an aforementioned legal threat regarding its use of Mastodon’s software. (Truth Social must be rebuilt from scratch or face legal action if TMTG does not comply within 30 days.) Its vulnerability to both hacking and inappropriate troll spam, combined with the inevitable consumer demand for as little moderation as possible, puts it at an existential risk of being deplatformed by app stores and web infrastructure companies if Trump does not enforce a code of conduct. 

Perhaps the clearest sign of the network’s lack of seriousness, however, was that nobody else in Trumpworld—outside of Trump social-media guru Dan Scavino, who is helping launch the network—seemed to know anything about TMTG’s plans until the SPAC merger was announced. “I’m assuming if it’s legit, there would be some more fanfare other than a press release,” one former Trump advisor told me, not to mention due diligence, or investment-committee style scrutiny.

Truth Social would face overwhelming competition in the saturated conservative media ecosystem, too. While a slide in its pitch deck suggests TMTG would “unify the fragmented ‘non-Big Tech’ universe” of free-speech platforms like Parler, Gab, Gettr, and Rumble, none of those rival companies are standing down. “We welcome the competition,” Gettr C.E.O. Jason Miller said sardonically last week. When I reached out to the former Trump aide for more detail, he pointed me to a post saying that Gettr signups had gone up by about 87 percent in the past few days. He also noted that the company had started running advertisements on Fox News—a more aggressive posture from his past efforts to court Trump. 

CloutHub, another “free speech network,” pointed me to a statement welcoming Trump to “our common fight against online censorship”, but positioned themselves as an ‘“all-in-one’ more purposeful alternative to Facebook” and encouraged members “to be on multiple platforms where they can take advantage of their different features and reach different audiences.” Meanwhile Gab—the social network with possibly the best functionality of the alternative platforms, but an unfortunate preponderance of white nationalist users—went on the attack, with C.E.O. Andrew Torba pointing out that DWAC’s C.E.O., Patrick Orlando, had recently launched another SPAC based out of Wuhan. (Frank Speech, the conservative “social-media site” run by Trump ally and conspiracist Mike Lindell, did not return a request for comment.)

The biggest risk to TMTG, however, isn’t the platform’s conservative competitors but the stultifying conservatism of TMTG’s would-be users, themselves. In years of reporting on Trump-friendly social networks like Parler, Gettr, and Gab, I’ve heard the same predictable complaint, over and over again: without liberal antagonists to fuel user engagement, digital “safe space” ecosystems are fundamentally boring. These conservative echo chambers begin as a revelation, quickly become tedious, and inevitably turn seedy as their lightly-moderated platforms are overrun with Nazis, trolls, scam artists, and pornographers, putting them at risk of being delisted by tech companies like Apple. Parler, which was overrun with Nazi imagery and hate symbols, was only allowed back onto the Apple Store after “months of productive dialogue with Apple”—a dialogue with Big Tech that I would barely imagine Trump engaging in.  

Trump, perhaps aware of the issue, has been advertising the forthcoming Truth Social app as a welcome place for liberals, although it seems unlikely that many Democrats will venture onto the platform. In a Morning Consult poll taken immediately after the company announcement, only 27 percent of Republicans and Trump 2020 voters said they planned to use Truth Social on a regular basis, while 76 percent of Biden voters said they wouldn’t use it at all.

A few weeks ago, shortly after he provided color commentary for a 9/11 boxing match at a Florida casino, I noted how Donald Trump appeared to be enjoying a spiritual gap year. With little competition for the Republican nomination, he has been able to indulge his commercial and political whims without any obvious long-term damage to a 2024 presidency. The Trump media SPAC, however, has thrown a tiny but potentially meaningful wrench into that proposition. Yes, this is another way to keep his supporters engaged politically, and it allows them to partake in the meme-stock phenomenon, proving once again their economic and cultural power in defiance of the cuck establishment—all while forking over their dollars to Trump (and his co-owners and sponsors, including the Wuhan guy). 

But it attaches Trump’s name directly to a potentially ruinous project that might embarrass his followers more than engage them, especially if some of these meme-stockholders enjoy the same write-down fate as his creditors at Deutsche Bank. Trump’s first post-presidency, post-Twitter personal blog, “From the Desk of Donald J. Trump,” was scuttled after it brought negative press over its clumsy product and anemic reach. The so-called “communications platform” lasted less than a month. Now imagine a blog that operates at an infinitely more complex scale, with engineering problems magnitudes more nuanced than an online bulletin board, handling millions of different users trying to post and interact across the site, all amid the scrutiny of a Nasdaq listing. 

Given the rushed timeline for the launch and the lack of obvious financial investment into the project, it’s unclear whether the Trump team is prepared to handle the scrutiny of a business directly attached to Trump’s name, rather than a lower-profile MAGA app. And unlike conveniently placed drywall or shady accounting maneuvers, an engaged Trump voter—especially boomers who have a degree of Facebook-savviness but still need help adapting to new technology—can immediately recognize a terrible online product when they see one. 

In the end, there may be a segment of disappointed investors who recognize the risk they took in piling into the stock market. That’s normal, even if it’s a meme stock attached to the president. (Just look at the Redditors who openly brag about taking steep losses on GameStop for the sake of sticking it to Wall Street.) But the ultimate political problem for Trump might be that he presented his alternative platform to Fight Big Tech—and that his followers eventually opted out. 

At this point, it’s absurd to project whether this venture will have any bearing on Trump’s 2024 prospects. If the stock remains artificially high, he’ll bandy it around as his latest business triumph. If it crashes, he’ll probably nuke his partners and walk away, leaving the rubble to the lawyers and accountants to clean up. All that appears clear is that Trump, in his twilight years, appears as focused as ever on making money. And the calculus around 2024 is destined to follow the same formulation. Will Trump make more by running in three years, or by venting his frustration from the sideline? If nothing else, the fate of TMTG may provide the early answer.