What happened
Shares of Digital World Acquisition (DWAC), the special-purpose acquisition company that's merging with Trump Media and Technology Group, were falling for the second day in a row as investors responded to resignations in key positions and further signs of disarray.
The news comes just weeks after the former president launched the new Truth Social media network.
The stock closed down 15.7%.
Image source: Whitehouse.gov
So what
Yesterday, Truth Social's heads of technology and product development both resigned from their positions, following the much-maligned Feb. 20 launch of the app on iOS. Since that launch, the app has struggled with a lack of content, technical glitches, and now the resignation of two key executives.
The app is not yet available on Android or Web browsers, and some media critics have labeled it a "disaster." Many of those who downloaded the app have been unable to use it.
Today the selling continued, as the possibility that Truth could blow up before it ever becomes a viable business is increasing. The Washington Post reported that the resignation of the two C-suite execs came after CEO Devin Nunes, the former U.S. Congressman, has attempted to install his own allies to help run the flailing company.
Trump himself has also fumed about the app's problems and hasn't posted on it in weeks, preferring to wait until there's a substantial audience and the app functions properly.
Now what
The merger between Digital World Acquisition and the Trump Media and Technology Group has not been completed, but the SPAC still has a market cap of close to $2 billion despite the woeful launch of Truth Social and Trump's own threats to take his posts elsewhere.
Building a successful social media app from scratch isn't easy, even for someone with Trump's name recognition, and there are plenty of Twitter also-rans like Gab, Parler, and Gettr. Trump's own motivation for launching Truth Social may have been nothing more than his ban from Twitter, and it's now clear the app clearly has a lot of obstacles to overcome before it can start building an audience.
Given the challenges, it wouldn't be surprising to see Digital World Acquisition shares fall further.
