Donald Trump’s Truth Social is facing a mammoth of crises ranging from financial troubles to legal tussles that could pose a serious threat to the growth of the social media company, which was created in response to the ban of the former US president from social media platforms.

In addition, the platform is also grappling with tech issues that their solution is not certain.

The Verge reported that the platform’s most immediate problem is the stalled merger between Trump Media and Technology Group and Digital World Acquisition Corporation, (special purpose acquisition company) SPAC, initially planned as a way to publicly trade shares in the new company without the diligence of an IPO.

According to the report, the SPAC has been delayed, leaving the Digital World Acquisition Corp., which was projected to take ownership of Truth Social, in an awkward position.

This has led to a financial crisis for the company. Truth Social has lost more than $6 million in the first half of the year, while holding only $293 million in a trust that houses most of its assets, and it has not made any revenue, according to SEC filings.

Truth Social’s merger with SPAC was scheduled to hold on September 8, but it is unlikely going to be due to its poor financial status. The company said it will need more money as its operation is already being affected by financial setbacks, asking that the merger be extended beyond the deadline.

A pointer to Truth Social’s financial woes was noted in a report by Fox Business that the company stopped paying RightForge, a conservative internet infrastructure company, in March. The report added that Truth now owes the internet company at least $1.6 million in accrued payments.

But that’s not all. Outside the financial troubles, Truth Social app has not been approved for Google Play store, due to content moderation concerns from the tech giant. Although Truth Social CEO Devin Nunes in an Aug. 26 appearance on the right-wing media outlet, Real America’s Voice, claimed he doesn’t know why the approval is taking so long, a source told Axios that Truth Social is very aware of the issue and it relates to incitement and threats of physical violence found on the right-wing social media platform.

“On Aug. 19, we notified Truth Social of several violations of standard policies in their current app submission and reiterated that having effective systems for moderating user-generated content is a condition of our terms of service for any app to go live on Google Play,” said Google in a statement to Axios.

This poses a threat to Truth Social’s potential user-growth. Although the app has recorded a growing number of downloads on the Apple Store, seeing a major increase averaging 13,400 downloads per day following the FBI’s raid on Trump’s Mar-a-Lago home, a large percent (44) of Americans use Android.

Truth Social’s iOS app, which was launched in February, received 107,500 downloads from Aug. 8 to Aug. 15, a number believed to have doubled if the app is available on AOS.

While Trump remains Truth Social’s biggest cheerleader, having a throng of supporters who had followed him from other social media platforms, his many legal cases may further compound the platform’s troubles.

An early investor sued Digital World Acquisition Corp (DWAC), Trump’s media company, on allegations that the company violated securities law. The lawsuit also alleges that it’s not entirely clear who is still on the company’s board, according to The Verge. There is an argument about whether Trump is still a member of the board.

The Verge noted that as part of its SEC filing this month, DWAC warned investors that the series of investigations into Trump, like those probing his businesses and his role in the deadly January 6th attack on the Capitol, could result in Truth becoming “less popular” if they damage Trump’s credibility.

However, Trump has been notably unconcerned about all these and Truth Social is hoping to strike a partnership deal with Rumble Ads. Rumble announced that it is launching its own advertising network and would welcome partnership. Truth Social has indicated interest, hoping to use the ad partnership to generate revenue.

Facebook’s Mark Zuckerberg has shut down products. Aliko Dangote’s Liberty Merchant Bank failed. Amazon’s Jeff Bezos wasted $billions in Amazon Fire. These generation-shaping entrepreneurs failed in some ventures.

And here is the lesson: when we praise innovators as being visionaries, it does not mean that they do not have setbacks. The difference is that they keep fighting, and sooner rather than later, they come up with what markets want. 

Indeed, success is not an absence of failure, because success includes failure as part of its components! Persevere and do not be intimidated by the big players; the best will always win, no matter how long.

Visionaries in markets as Facebook shuts down its standalone Gaming

Elon Musk is pushing through another legal notice to quash his $44 billion Twitter acquisition deal that has lingered for months since it was initiated, due to concern that the platform is highly made up of spam accounts.

Musk’s legal team filed a notice on Tuesday to terminate the deal, citing additional reasons based on former Twitter’s head of security, Peter Zatko’s allegations of “extreme, egregious deficiencies” by the social media company related to its handling of user information, spam bots and content moderation.

“These allegations, if true, demonstrate that Twitter has breached the following provisions of the merger agreement, thereby giving the Musk parties the right to terminate the merger agreement,” Musk’s lawyers said in a letter sent to Twitter.

The latest notice is building on the one filed by Twitter earlier on July 8, with the US Securities and Exchange Commission, which seeks to terminate the deal on the ground that Twitter has not been true to the acquisition agreement.

In his allegations, Zatko, a veteran hacker and security expert known as “Mudge”, says Twitter has deceived users, board members and the federal government to believe that the company’s security measures are stronger than it actually is.

“Twitter is grossly negligent in several areas of information security,” Zatko wrote in an analysis written in February that was included in the complaint. “If these problems are not corrected, regulators, media and users of the platform will be shocked when they inevitably learn about Twitter’s severe lack of security basics.”

Musk’s legal team cites these allegations as complement to his original reason for backing out of the deal.

“Allegations regarding certain facts, known to Twitter prior to and as of July 8, 2022, but undisclosed to the Musk Parties prior to and at that time, have since come to light that provide additional and distinct bases to terminate the Merger Agreement,” Mike Ringler, Musk’s legal representative from Skadden, Arps, Slate, Meagher & Flom, wrote in a letter to Twitter’s legal chief, Vijaya Gadde.

The letter said Zatko’s allegations constituted a “company material adverse effect” that substantially altered the business’s value and therefore rendered the deal invalid. Among the many irregularities cited against Twitter are; not complying with data privacy laws and regulations, not complying with an agreement with the US Federal Data Commission in 2011 to better protect users’ data.

The letter added that Zatko “alleges far-reaching misconduct at Twitter—all of which was disclosed to Twitter’s directors and senior executives, including (CEO) Parag Agrawal—that is likely to have severe consequences for Twitter’s business.”

It said that Twitter’s CEO, Parag Agrawal, breached the agreement by failing to disclose to the board an internal report prepared by Zatko at the beginning of 2022. The notice also states that Twitter had committed fraud by not disclosing the privacy, data protection, safety and cybersecurity risks raised by Zatko, which gives Musk the right to “rescission” – or ripping up the deal contract.

In response, Twitter said in a letter sent to Musk’s legal representatives that his notice to terminate the deal based on Zatko’s allegations is “invalid and wrongful under” the acquisition agreement.

“It is based solely on statements made by a third party that, as Twitter has previously stated, are riddled with inconsistencies and inaccuracies and lack important context,” the letter written by William Savitt of Wachtell, Lipton, Rosen & Katz law firm said.

“Contrary to the assertions in your letter, Twitter has breached none of its representations or obligations under the Agreement, and Twitter has not suffered and is not likely to suffer a Company Material Adverse Effect.”

Twitter’s legal team added that Musk’s latest notice to terminate the deal is “invalid for the independent reason that Mr. Musk and the other Musk Parties continue to knowingly, intentionally, willfully, and materially breach” the acquisition agreement.

But Ringler said in the letter that the latest termination notice is “not legally necessary” to end the merger deal, but is being delivered in case the July 8 filing is “determined to be invalid for any reason.”

However, the latest development could give Musk an edge. The Guardian quoted Brian Quinn, professor at Boston College Law School, saying that Twitter would have to update its original lawsuit and that Musk would seek to delay the trial as a result, having originally argued for a trial date next year to give him more time to prepare his case.

“When Twitter amends its complaint it’s likely that Musk will point to the amended complaint as a reason to delay the trial. And the court, my guess is, will seek to accommodate that request,” he said.

I want to congratulate Tekedia Mini-MBA edition 8 learners as they  graduate on Saturday, Sept 3, 2022.  My understanding is that learners in many cities are independently organizing graduation hangouts. Let me wish everyone safe travels and connections. Since this has become a really great event in our community, Tekedia Institute will explore how we can make the next one a bigger festival.

My promise is that very soon we will have a physical annual graduation event that will be a supreme academic festival which will be streamed live on ChannelsTV or AIT. I will join all of us live.  We are humbled by this movement – thank you so much for the opportunity to serve.

As I write, a Lagos-based company is funding 1,000 students. You need to understand that our fees per edition of 12 weeks is more than what University of Lagos (or any peer in Nigeria) charges for 12 months. As companies do this via Tekedia Institute, we are humbled. We have asked the firm to join to meet some of our learners in Lagos Lagoon Restaurant; welcome it please.

Tekedia Mini-MBA is a symbol of excellence – and we’re the largest business school in Africa.  This is an invitation-only event and reserved for Tekedia Mini-MBA learners; Eyitayo Adeleke coordinates all aspects.