Trump’s Truth Social Faces FINRA Inquiry Amid Financial Turmoil

Donald Trump's social media company, Truth Social, has confirmed its cooperation with an inquiry from the Financial Industry Regulatory Authority (FINRA) concerning its blank-check merger with Digital World Acquisition Corp (DWAC:US). This investigation, focusing on trading activity prior to the merger announcement should not be seen as an implication of misconduct, according to Trump Media and Technology Group (TMTG).

TMTG has experienced significant volatility since its market debut. Enthusiastic support from Trump loyalists initially propelled the stock to soar by as much as 59% during its Nasdaq debut on March 26. However, the stock has since reversed its gains, leaving the company with a market valuation of nearly $7 billion.

Former President Trump, who holds a majority stake in TMTG and is campaigning as the Republican candidate for the upcoming presidential election, remains an active user of Truth Social. The platform aims to establish itself as a bastion for free speech.

Compounding its challenges, TMTG recently delayed its quarterly report following the dismissal of its auditor, BF Borgers, which the Securities and Exchange Commission accused of “massive fraud.” TMTG's latest earnings report revealed a substantial net loss of $327.6 million for the first quarter. CEO Devin Nunes attributed the losses to non-cash expenses incurred before the merger's closure.

As of April 29, TMTG reported having 621,000 shareholders, predominantly retail investors. Despite the financial setbacks and regulatory scrutiny, the company continues to navigate its tumultuous journey in the social media landscape.