Trump Media & Technology Group plans to spin off Truth Social into a separate public company, according to reports this week. The move is being considered as the company faces mounting losses, partly related to its digital asset holdings. Negotiations are ongoing and the final agreement has not been signed.
Trump’s social truth can stand on its own
The company is reportedly considering an allotment of shares in a new entity, Truth Social, to existing investors. That stand-alone company may later merge with a special purpose vehicle and give it its own stock listing. Discussions are said to be active but remain subject to board and shareholder approval.
Truth Social has served as the primary social media platform associated with US President Donald Trump. The spin-off separates it from the broader corporate structure, which has recently shifted direction. By placing the platform on its own vehicle, the company can allow investors to value the social media business apart from other ventures that are currently underway.
Regulatory documents are required to be finalized before any transaction can take place, reports state. The structure is still taking shape behind closed doors.
Crypto-related losses add to the pressure
Financial results overshadowed the company’s plans. According to recent disclosures, Trump Media posted a net loss of more than $700 million last year, a sharp increase from the year before. Much of this loss is related to changes in the value of digital assets and related financial instruments held on its balance sheet.
Earnings remained low, running in the low millions, while net losses from asset revaluations widened. Some of these losses were non-cash items, meaning that no money was flowing directly from the company. However, the numbers were significant and weighed heavily on the overall results.
Crypto exposure has attracted attention because it highlights the risks associated with volatile asset classes. When prices drop, balances can quickly hurt. This effect was felt in the last reporting period and it shaped the financial picture of the company.
Energy transactions are changing the direction of the company
The separate talks come after Trump Media agreed to merge with energy company TAE Technologies in a deal worth about $6 billion. The deal marked a departure from being seen primarily as a social media operator.
After the merger is completed, the company’s main focus will be more on energy development. Social truth, if separated, operates independently. Shares in the new social media company could be issued to existing holders before the wider restructuring closes.
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