Twitter Under Elon Musk Threatens to End Trump’s Truth Social Media Venture

Former U.S. president’s potential return to Twitter is worrying investors in the shell company tied to Trump Media’s Truth Social

A demonstrator holds a sign reading "Truth" at a protest.
By Claire Ballentine and Sophie Alexander
April 25, 2022 | 04:54 PM

Bloomberg — Twitter Inc. under Elon Musk has the potential to end Donald Trump’s Truth Social.

Musk, who reached a deal Monday to buy Twitter for $44 billion, said he aims to make the social-media platform “an inclusive arena for free speech.” While Trump told Fox News on Monday he doesn’t plan a Twitter comeback if his permanent ban ends, speculation about his return was enough to torpedo the shares of Digital World Acquisition Corp., a special purpose acquisition company aiming to merge with Truth Social owner Trump Media & Technology Group.

DWAC shares were trading down 12% at 3:30 p.m. in New York after earlier falling as much as 19%.

“Twitter becoming open to a bigger variety of voices is likely to the be last nail in the coffin of Truth Social’s SPAC,” said Max Gokhman, chief investment officer at money manager AlphaTrAI Inc. “It’s hard to see any upside for them given all of the internal struggles with even launching a scalable social platform and now the likelihood that Twitter will allow a broader range of discourse.”

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Gokhman noted that for Trump, “a bigger audience is an irresistible lure.”

Devin Nunes, chief executive officer of Trump Media & Technology Group, told Fox Business Monday before the deal was announced that he was in favor of Musk’s potential acquisition and he doesn’t necessarily see Twitter as a threat.

“Twitter is a global PR wire, it’s not a community like what we’re trying to build,” he said. “There’s just not that many people on Twitter, quite frankly.”


Not long ago, the SPAC was among the best-performing blank-check companies on the market. But since its high on March 4, it’s tumbled more than 65% as downloads of Truth Social have slumped.

That’s a concern for those investors who piled cash into DWAC, although it’s far from the only one. Last week, hedge fund Kerrisdale Capital Management bet against the SPAC, speculating that regulators will crack down after it gave misleading statements in its registration documents. Earlier in the month, Truth Social’s chiefs of technology and product development resigned, which sent the shares spiraling.

Sarah Mostafa, a physical therapist and DWAC investor in New York City, said that Musk buying Twitter could “definitely be a threat” to Truth Social. Musk’s version of Twitter “will be very competitive with DWAC if he actually makes changes to purify Twitter of its poor policies,” she said.

Right now, she’s “cautiously” following and waiting to hear about Musk’s plans, but said she’s not selling DWAC yet.


Rafael Morales, a 40-year-old military veteran from New York City, bought almost $100,000 worth of DWAC at about $109 a share on Oct. 22, two days after the company announced a deal to merge with Trump Media & Technology Group. Even though the stock has tumbled over the past few months to around $36.50 on Monday, he’s holding strong.

“It’s a nerve wracking time to be honest, but I’m in it — I’m not backing down,” he said, adding that his biggest fear is that Musk will invite Trump back to Twitter if the deal goes through.

“If Trump does that, then we don’t have a Truth Social anymore because, let’s be honest, the people who are here are only here for Donald Trump,” he said.


Morales is disappointed that Trump hasn’t been more active on Truth Social – he’s only “truthed” once — but he’s hopeful that ahead of the midterms the former President will start “truthing” more. In the meantime, he’s not going to give up.

“I’m not going to give shorts the satisfaction of taking money from me,” he said. “I’d rather just see it run to the ground.”