There is more turmoil at Trump Media & Technology Group (TMTG) than ever before with some of the company’s top executives ousted on claims of mismanagement by the CEO Devin Nunes. And these insider woes do a disservice to the company’s core platform Truth Social, which has failed to catch on in the fiercely competitive social media marketplace.
The job losses, which include Chief Operating Officer Andrew Northwall and Chief Product Officer Sandro De Moraes, have likely been associated with a whistleblower letter to the board of directors, according to people within TMTG who spoke with ProPublica. The complaint is allegedly focused on Nunes’ management and direction for the company, and thus feeds further suspicion of implosion at the Trump-appointed media house.
This company – which was founded in 2021 to serve as a conservative alternative to traditional social media networks – has struggled at every level, both technically and financially. Their flagship brand, Truth Social, has not made it big in the social media arena and is not attracting the massive number of users required to challenge players like X (aka Twitter) or Meta’s Threads.
Representations of Mismanagement and Leadership Concerns.
The whistleblower claim purportedly charges Nunes with operating TMTG with no strategic vision and low financial performance. Despite Nunes’ leadership, Truth Social has failed to turn a good profit and achieve the size initially envisaged by its investors. People with knowledge of the process cite ongoing complaints within the company about Nunes’ decision making that has limited the platform’s potential.
Northwall, who’d served as COO, made the announcement on Truth Social last week that he was “very grateful” for the opportunity, but had “determined to step down” from his position. De Moraes, the CPO, has not announced his retirement but rumour has it that it was also related to discontent with company leadership.
Trump Media called it out in a statement to ProPublica, accusing the whistleblower allegations of a politically motivated attack. According to the company, these reports “simply create completely unwarranted speculation about bad and even illegal practices that do not hold water.” The company also charged political lobbyists with seeking to misuse media platforms to attack TMTG’s name while insisting that the firm “thoroughly respects all applicable laws and regulations”.
Financial Stability and Defying Stock Markets.
The TMTG internal leadership crisis unfolds at a moment when the company’s cash balance seems to be teetering. Only last month, one of the company’s largest owners divested 11 million shares (which were worth between $128 million and $170 million) as soon as insider trade was unblocked. The reversal precipitated TMTG’s stock price sinking almost to a small percentage of its price at its initial public offering in March.
The downturn has cast doubt on the firm’s future prospects, as investors are speculating about the ability of Truth Social to ever be profitable. The site, founded to be a free speech haven for conservative voices, has been unencumbered by an outside user base. It was initially popular among right-wingers fed up with Twitter and other platforms, but it hasn’t made a splash beyond that.
Donald Trump, TMTG’s 57% shareholder, has so far been reluctant to jettison his shares as the company’s share price is down. Trump owns 115 million shares in the company, which amount to a major portion of his wealth. But dumping those shares would send investors a clear message that Trump Media’s existence is under threat, and even set up a downward stock market correction. Trump’s aversion to sell, even for its imminent moneymaking potential, leaves open the possibility that he remains optimistic about the future success of the platform.
Truth Social’s Attempts to Break into the Social Media Scene.
Although Truth Social was envisioned as a social networking alternative to major social platforms, it has generally failed to deliver. Its competitors – like X (previously Twitter) and Meta’s Threads – are still kings of the industry, providing users with wider scope and larger, more diverse communities. Truth Social, meanwhile, has always been focused on a very specific demographic — mostly conservatives and Trumpets.
Some argue that the platform’s innovation crisis is a prime reason why it has failed. While other apps regularly introduced new features to keep people in the app, Truth Social hasn’t moved quickly enough. Its inaccessibility makes it doubtful whether the platform will ever be able to make ends meet as it is unable to capture advertisers and other income streams necessary for social media success.
Leadership Rumors & Trends for 2016
Throughout his tenure as CEO, Nunes’ direction has been the cause of debate. As he’s left Congress to lead TMTG, he’s received an increasing amount of criticism about his leadership and decision-making. He had been a lackluster tech veteran, according to some people close to the company, and a cause of recent internal upheavals at the platform.
Adding further tension to the company’s path are continued legal and financial struggles for Donald Trump. It was a legal mess for the former president that’s caused more than half a billion dollars to be spent in accumulating expenses. Both Trump’s involvement and TMTG’s own problems led many to wonder if the company will survive its storm.
Some commentators have compared TMTG’s current crisis to other Trump projects not delivering as promised. Such as Trump NFTs, a line of digital trading cards mocked by most, and a cryptocurrency exchange launched by Eric Trump and Donald Trump Jr that even Trump’s closest supporters have come to doubt.
Now that TMTG is suffering from a host of financial and operational issues, Truth Social looks vulnerable. With employees out, stock price down, and CEO’s on the loosing end, the company will have to go through a transformation if it wants to continue to thrive in a social media marketplace that is becoming fiercely competitive.
Read ProPublica’s entire investigative piece here to learn more, and read about the financial details of TMTG’s struggle in The Wall Street Journal here.
