Donald Trump loves Twitter.
The president in 2017 claimed he would not have been president without it.
“Twitter is an amazing option for me because it lets me get information around… The truth is, I could not be speaking to you now as president in the absence of an honest way to get news out about my work,” he said.
Following the announcement that Twitter’s new owner Elon Musk reversed President Trump’s suspension on a permanent basis it was possible that Trump would leap at the chance of coming back. So far, he’s not taken up the offer.
Why?
It’s true that just Donald Trump knows the answer to that question.
However, what can we say is that he has a substantial amount of money at stake from tweeting.
“The most straightforward explanation is most likely one: it’s related to money.” claims Josh Tucker who is a professor of political science in New York University (NYU).
In the wake of Donald Trump was kicked off Twitter He then created the company’s own online social media platform – Truth Social – that looks quite a lot similar to Twitter.
To fully comprehend the financial mess Donald Trump is in, it is important to comprehend the complexity of the company’s created.
In 2013 the private firm that controls Truth Social, Trump Media & Technology Group (TMTG) announced that it was planning to join forces with a shell company that trades on the exchange known as Digital World Acquisition Corp (DWAC).
DWAC is also commonly referred to as an Special Purpose Acquisition Company (Spac). Spacs are marketed as a method of speeding up the sometimes slow procedure of making an unlisted private company public. Simply put it’s about merging a business that’s not listed on a stock exchange, to one which is.
Each TMTG together with DWAC have reached an agreement to merge however the deal isn’t fully concluded. However, that hasn’t stopped investors from pouring money into DWAC as well as believing that the merger will be completed. Its shell is valued at more than $800 million (PS665m).
If you take into account that DWAC will only acquire approximately one-quarter of TMTG the newly formed company is valued at least $3-4 billion Michael Ohlrogge an academic who specializes in Spacs.
“He would control the majority. He could own 70% or even 80% part of the.”
If all goes as planned it could be among the top profitable of the Trump’s career.
The key to keeping the value of your stock high is to make certain that former President remains in the realm of Truth Social – and exclusively doing so.
It’s difficult to imagine the things Truth Social has going for it , without Donald Trump. The company that operates social media was founded by Trump. Why should his followers make use of the platform even if he’s already posting elsewhere?
Truth Social is already struggling to get users. An analytics company Similar Web estimates the platform had 8 million page visits in September 2022. That’s less than 11.5 million visitors in July. For a company that is a social media one this is a tiny number.
Should Donald Trump were to stop posting, or even move the issue elsewhere, he may ruin the price of shares of DWAC and wipe hundreds of millions off its worth.
It was so important that Donald Trump’s exclusiveness to Truth Social to the proposed merger with DWAC which is why an unconstitutional provision was included in the contract.
The law states it states that “President Trump is generally obligated to post any social media content exclusively on Truth Social and may not make the same posting on a different social media site for six hours.”
This means that not only would Donald Trump lose a lot of money using Twitter (by alarming investors) but he also could be accused of libel.
“It’s difficult to determine the winner however it would not be the most logical suit to attempt to bring,” says Ohlrogge.
It’s a sign that Donald Trump is now in a dilemma. Trump may decide to rejoin Twitter. However, he’s financially as well as legally incentive-driven to not do so.
However, there are other elements to consider which could result in him tweeting again.
The share price has been acting quite bizarrely recently.
It is not just an area where people can actually buy shares in Truth Social, people have purchased DWA shares to be able to use it as a method to invest on the previous president.
“It’s the meme company,” says Michael Klausner Prof. of Law at Stanford University. Meme stocks are those with a lot of investors that are either social media users or online which can push the share price up or down.
Klausner claims that many investors who have made investments in DWAC are Trump’s supporters.
“They believe that the Trump name on something is useful,” he says.
The price of DWAC’s shares increases when the fortunes of Donald Trump are rising and then falls when things are taking turns for the worse.
On the 7th of November the stock price soared following reports that he was planning to run for the presidency in 2024. Nine days after that, when he announced his plans in a speech condemned as “low energy” The price of the stock declined.
The idea is that, even though DWAC has joined forces into Truth Social, what it’s doing is giving Donald Trump an opportunity to promote his personal brand name – on the stock market. If this is true, it wouldn’t matter that much if Trump was to cease using Truth Social – as the social media firm is just acting as a proxy for Trump himself.
In the case of Josh Tucker from NYU, this situation raises some interesting moral issues.
“I haven’t had the opportunity to hear about this before. That there’s a huge amount of money devoted to what appears to be the fortunes of a politician. of an individual politician.”
He cautions that a politician could take decisions based not on what is best for their political goals or financial goals, but on their financial needs instead.
“If your a Republican then you may prefer your Republican candidate to make use of the media to the very best of their abilities,” he says.
Tucker believes that If Republicans were to choose Donald Trump as their presidential nominee, they’d expect him to use a wider social media when he campaigned instead of limit himself to one social media platform to make money.
However, Donald Trump may have anticipated this issue. In the merger agreement is a clause that permits the president to utilize different social media platforms to send “political messages”.
This could be it’s a “loophole” Klausner says Klausner which would permit Trump the ability to post tweets without breaking the terms of the agreement.
And, not only that, Trump is Trump is bound only by the terms of the agreement to post only his posts exclusively on Truth Social until July 2023 Ohlrogge says.
“My conclusion is that at this point, he’d legally be able to post directly on Twitter and not have to post via Truth Social,” he states.
There’s another reason why Donald Trump might come back to Twitter. This merger is in the midst of a Federal investigation.
The deal may still be a failure in which case Donald Trump’s legal promise to exclusively post Truth Social would be ripped up. Truth Social would also be taken away.
Mr. Trump could lose money, however it will make the way for a possible return to Twitter.
As with many of Mr. Trump’s financial dealings it’s a bit complicated. It’s also complicated because Donald Trump is not a person that can be easily predicted.
However, what we do know is that if the CEO to stay to Truth Social exclusively, and complete the Spac merger, he’d probably make a modest fortune.
It’s hard to understand how this doesn’t play a key aspect of his thinking. What will be the impact of this as we approach an election?
It might happen. However, for the moment the moment, President Trump is staying in the White House.
