Elon Musk officially reinstated former President Donald Trump’s Twitter account over the weekend, a decision that could have major implications for the future of Trump’s own social platform, TRUTH Social.
Musk announced the decision on Twitter after taking a poll on the platform on Saturday, in which 52% of the more than 15 million Twitter users who responded voted in favor of Trump’s return. “The people have spoken,” Musk wrote. “Trump will be reinstated.”
Trump’s account was restored to Twitter with 86.4 million followers. However, as of Monday morning, the former president has yet to tweet anything new. Trump sent his last tweet on Jan. 8, 2021 before being permanently banned from the platform due to “the risk of further incitement of violence” following the deadly Jan. 6, 2021 insurrection at the U.S. Capitol.
Trump has previously said that he would not return to Twitter if Musk reversed his ban in favor of remaining on TRUTH Social, the alternative right-wing platform he created last year under the umbrella of his media company, Trump Media & Technology Group, to “stand up to the tyranny of Big Tech.”
But there’s now a notable new factor at play. Musk’s decision comes shortly after Trump officially announced that he is once again running for president, which could make it difficult to resist using Twitter, a platform that is commonly used by candidates and other politicians across the spectrum and around the world. Trump’s following of 4.59 million on TRUTH Social remains a fraction of the size of the audience of more than 80 million he has on Twitter.
“Twitter gives him a megaphone that he otherwise doesn’t have,” Jonathan Nagler, co-director of NYU’s Center for Social Media and Politics, told TIME earlier this year. “And he’s shown that social media is a very, very important way that he communicates with the public.”
At the same time that Trump seeks to shore up his base after some Republicans blamed him for a string of midterm losses for their party, TRUTH Social is at a crossroads. More than $1.3 billion in financing for the platform is dependent on the completion of a planned merger between Trump Media and blank-check company Digital World Acquisition Corp that currently must be completed by Dec. 8. The deal is facing investigations by federal prosecutors and securities regulators that could force Digital World to liquidate in early December, which would put an end to the merger.
If Trump revives his presence on Twitter, experts say TRUTH Social’s future could be all but decided.
The precarious state of TRUTH Social
TRUTH Social has served as Trump’s primary megaphone to his followers since he was banned from Twitter. Since announcing his 2024 bid for the White House on Nov. 15, Trump has bombarded his followers on TRUTH Social with dozens of “Truths” and “ReTruths” hyping up his presidential run. Even after Musk, who had previously suggested he would allow Trump back on Twitter, completed his takeover of the platform last month, Trump reiterated his support for TRUTH Social in a post on the site in which he claimed that it has “become somewhat of a phenomena.”
“I wouldn’t be surprised if he stayed exclusive to TRUTH Social, given his presence represents the only advantage of the platform,” says Julian Klymochko, CEO of investment firm Accelerate Financial Technologies.
However, some reports indicate that Trump is unhappy with his lot on TRUTH Social. According to the Washington Post, Trump has told allies that he is unable to leave TRUTH Social, because he is the one propping it up, and he doesn’t want a platform that is tied to his brand to collapse.
Read More: TRUTH Social’s Biggest Problem Is Trump
“Trump has a decision to make: Does he start to use Twitter again, or does he use Trump Media sites exclusively for getting his message out?” says Jay Ritter, a finance professor at the University of Florida. “Trump Media would be worth more if he uses it exclusively, but he is likely to reach a larger audience with Twitter.”
Trump’s Twitter reinstatement comes just ahead of a pivotal Digital World shareholder vote on Nov. 22 that, if successful, would allow the special purpose acquisition company (SPAC) to extend the deadline for its merger with Trump Media by a year and keep the deal alive.
The vote was originally scheduled for Sept. 6 but has been adjourned repeatedly since then, seemingly because the company has failed to get approval from the necessary 65% of shareholders it needs to vote in favor of the extension. The Digital World deal is a particularly unusual SPAC deal because it has attracted so many retail—or individual—investors, Ritter says.
“Because so many of the shares are held by individuals who aren’t paying attention to what’s going on, the SPAC has been having trouble getting enough shareholders to vote,” he says. “It’s not that there’s a block of shareholders that are opposing the merger, it’s just that not voting is the same as voting no.”
Digital World’s retail investor problem is one of two “big elephants in the room” for the merger, Ritter says. “Regulators have not given the green light to a merger, even if shareholders approve,” he says.
In a December 2021 filing with the U.S. Securities and Exchange Commission (SEC), Digital World disclosed that SEC regulators are investigating whether the leadership of Digital World and Trump Media engaged in negotiations before Digital World went public in September 2021, which would have breached securities laws. The SPAC has also disclosed that a federal grand jury in the Southern District of New York issued subpoenas to each of its board members related to the planned merger.
Neither TRUTH Social nor Digital World responded to TIME’s request for comment.
What could happen next
A successful shareholder vote on Tuesday—or a later date if it is postponed again—would allow Digital World to push the merger deadline for a full year. But Digital World also has another extension option. The SPAC’s sponsor injected $2.9 million into the deal in September to delay the merger deadline three months beyond its initial Sept. 8 expiration date, and could opt to do so again to extend another three months past Dec. 8 as it waits for a favorable vote.
Without another sponsor contribution, the vote’s failure could result in Digital World liquidating and returning the money raised in its initial public offering to shareholders. This would effectively kill the deal and mean that Trump Media, and by extension TRUTH Social, would not receive its expected funding.
“There’s the possibility that the SPAC will put in some more money and lobby for yet another vote in the future,” Ritter says. “But there’s definitely a decent chance of liquidation.”
At that point, Trump Media would need to come up with alternative financing to keep TRUTH Social running. The New York Times reported earlier this month that the company has raised roughly $37 million of its own money, mainly from Republican political donors, but is burning through about $1.7 million in cash each month.
“A collapse of the SPAC merger doesn’t necessarily mean an end to Trump Media,” Ritter says. “As long as there are some people who think that this is likely to be a successful company, presumably some alternative financing can come in to get it up to scale and profitable.”
What Trump chooses to do with his newly reinstated Twitter account will likely have a substantial impact on the future of TRUTH Social, observers say. At the same time, the Trump name is the “main value” behind Trump Media, Ritter says. If Trump were to make a grand return to Twitter amid his presidential run, it might dilute that value and put future prospects for the company in jeopardy.
“I fail to see TRUTH Social’s appeal if Trump also provides the same content to Twitter,” Klymochko says.