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The Fund Providers For Trump's Truth Social Platform

The Fund Providers For Trump's Truth Social Platform
Since former US President Donald Trump founded a new media company to compete with Twitter, there has been speculation about who provided the funding. Trump, however, did not. So, who did it?
A stash of material submitted by attorneys representing William Wilkerson, a former executive who filed a whistleblower claim with the Securities and Exchange Commission (SEC) against the media company and Digital World Acquisition Corp, the blank-check firm taking it public, now contains some answers.
According to the documents, Truth Social's early backers included six businessmen from outside the Silicon Valley mainstream, including two executives from an oil company and a gym chain, several Republican donors, a former US ambassador to Portugal, and the CEO of a mail-order fruitcake company.
The participation of previously unidentified financial supporters of Trump Media & Technology Group (TMTG), the parent organization of social media app Truth Social, demonstrates how Trump used his political supporters to launch an outlet aimed at political conservatives and libertarians after being barred from Twitter and Facebook following the Jan. 6, 2021 attack on Congress.
Representatives for former President Trump and TMTG did not respond to a request for comment on the investors named in the documents submitted by Wilkerson to the SEC and DOJ, as well as other parts of this story.
The whistleblower complaint also names Digital World CEO Patrick Orlando and TMTG co-founders Andy Litinsky and Wes Moss, who did not respond to requests for comment.
The investors' involvement in TMTG, gleaned from promissory notes dated between May 2021 and mid-2022, provides new information on the venture, which has struggled to attract tech talent and corporate partners, as reported by Reuters. The names have not previously been released.
According to the documents, Karl Pfluger, president of Midland, Texas-based oil and energy firm Oryx Midstream Services, which is owned by private equity firm Stonepeak Infrastructure Partners, invested $5.3 million in December 2021 and another $4.5 million in March 2022. Pfluger is the brother of August Pfluger, a Republican Congressman from Texas and vocal Trump supporter who received Trump's endorsement for the first time in February 2020.
August Pfluger's spokesperson told Reuters that he has no personal investment in Trump Media & Technology Group and that "he earned President Trump's endorsement long before the creation of Truth Social."
Patrick Walsh, CEO of the holding company that owns luxury gym brands such as TMPL, Palm Beach Sports Clubs, and LIV, spent $6.2 million between December 2021 and February 2022. According to a May SEC filing from DWAC, he worked with Phillip Juhan, the financial chief at fitness chain operator Town Sports International Holdings until Juhan left to take on the same role at TMTG.
Texas telecom billionaire Kenny Troutt, a vocal Trump supporter, invested $4 million between May and November 2021 through his money manager Nicholas Merrick. According to publicly available campaign finance data, he donated $200,000 to Trump's 2016 campaign and another $925,000 to Trump's 2020 re-election campaigns.
Between May and October 2021, Roy Bailey, the CEO of Bailey Deason Capital Investments in Dallas, Texas, and the national co-finance chairman of Trump's 2020 re-election campaign, invested at least $200,000 in Trump's re-election campaign.
George Glass, a Trump fundraiser and Oregon real estate developer, served as U.S. During the Trump administration, Ambassador to Portugal, invested $500,000 on January 24, 2022. Bob McNutt, the CEO of a mail-order fruitcake company in Corsicana, Texas, invested another $100,000 the same day. McNutt has long been a Trump supporter.
Requests for comment from Bailey, Pfluger, McNutt, Glass, Walsh, and Troutt were not returned.
According to SEC filings, the $22.8 million in financing from these backers, who operate largely outside the ecosystem of venture capital investors that tech startups frequently tap, is part of the $38 million in debt TMTG has raised since May 2021.
Truth Social was released in the Apple App Store in February and the Google Play Store in October by TMTG.
TMTG announced a deal to go public a year ago by combining with Digital World Acquisition Corp (DWAC), a special purpose acquisition company (SPAC). The transaction is now in jeopardy due to investigations by the Department of Justice and the Securities and Exchange Commission, which have delayed its completion.
The Miami Herald and The Washington Post were the first to report on the whistleblower complaint, based on a cache of documents obtained by Reuters.
If TMTG's agreement with Digital World is completed, TMTG will have access to more than $1 billion in cash from DWAC's institutional investors, which include hedge funds. The former president owns 90% of TMTG, according to a services agreement dated February 2, 2021.
The company's legal department, through a spokesperson, did not comment on the investors, but did say that Trump hired TMTG Chief Executive Devin Nunes, a former Republican congressman, to create a "culture of compliance and build a world-class team to lead Truth Social."
SPACs are publicly traded companies formed to allow investors to pool their funds in the hopes of merging with a private company, which then goes public through the merger.
The documents provided by the whistleblower's attorneys also include four additional promissory notes totaling $9.4 million from entities the identities of which Reuters cannot confirm.
The notes are a type of short-term debt that can be converted into company shares when TMTG goes public. If this occurs, investors will receive shares of the company at roughly half the price the stock will be trading at and will be able to sell them immediately, according to the documents.
According to a letter from a TMTG lawyer to Wilkerson, shown to Reuters by Wilkerson's lawyers, Phil Brewster, Patrick Mincey, and Stephen Bell, TMTG fired Wilkerson on Oct. 13, claiming that he violated his non-disclosure agreement by sharing information with media outlets.
Truth Social has seen spikes in interest, but its user base remains small in comparison to the growth targets set by TMTG in November, when the company told investors the app would reach 56 million users by 2024 and 81 million by 2026. According to market tracker Appfigures, Truth Social has been downloaded 2.9 million times across both platforms.
Trump had 4.37 million followers on Truth Social as of Oct. 27, compared to more than 88 million followers on Twitter when the platform suspended him permanently.

Christopher J. Mitchell

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