Could Truth Social help former President Trump earn billions before becoming profitable?

A social media platform, Truth Social, is primarily owned by former President Donald Trump.

A group of early investors aim to "halt Big Tech's attack on free speech." However, accomplishing this may necessitate a significant increase in its user base, which is currently unclear.

CNBC was unable to obtain Truth Social's usage data, which is crucial for measuring advertising sales and determining the platform's success. When asked for comment, the company refused to disclose this information.

Trump Media & Technology Group, the parent company of Truth Social, was formed through a blank-check merger with a special purpose acquisition company (SPAC) in March 2024. The company now trades under the stock ticker DJT.

Trump could financially benefit from a business formation strategy and a public market launch of TMTG, earning billions before the 2024 election. As of July 2024, Trump owned 114,750,000 shares of TMTG's Common Stock, which is about 65% of the company. He could sell some of his shares as early as September.

The former president is eligible to receive up to 4,061,251 warrant options, each convertible into one DJT share.

In July 2024, the stock price was approximately $33 per share, higher than the $10 share price offered to early investors of the project, which was then known as Digital World Acquisition Corporation. Despite reporting significant losses against low revenues, investors have kept the company afloat.

"The meme stock phenomenon is what explains the share price," said Michael Klausner, a professor of law and business at Stanford Law School.

Trump Media & Technology Group's Securities and Exchange Commission filings highlight the risks of not fulfilling its promise to attract users and advertisers. Despite this, the platform is currently focusing on expanding its U.S. user base. For more information about Truth Social and its parent company, watch the video above.