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Trump Media's Truth Social Faces NASDAQ Debut Delay Amid Regulatory Challenges


Lauren Miller

May 3, 2024 - 18:43 pm


Truth Social to Navigate Regulatory Hurdles before NASDAQ Debut

Investors eagerly waiting for a financial performance update on former U.S. President Donald Trump's media venture will need to exercise patience. Transparency concerning the fiscal state of Trump Media & Technology Group Inc., the parent company of the social networking site Truth Social, has been postponed, potentially for several months.

The Truth Social website on a smartphone arranged in New York, US, on Friday, March 22, 2024. Shareholders of Digital World Acquisition Corp., a publicly traded shell company, approved a deal to merge with the Trump's media business in a Friday vote. That means Trump Media & Technology Group, whose flagship product is social networking site Truth Social, will soon begin trading on the Nasdaq stock market, reported the AP. Photographer: Gabby Jones/Bloomberg

The delay stems from a decisive blow dealt by the US Securities and Exchange Commission (SEC) on Friday. The SEC has issued a permanent suspension against Trump Media & Technology Group Inc.'s auditor, BF Borgers CPA PC. Regulators have barred the accounting firm from operating or appearing as accountants before the SEC, citing a consistent pattern of issues and "nonexistent" auditing work, effectively paralyzing Trump Media’s financial disclosure process.

The Auditor’s Dilemma

The inquiry into BF Borgers CPA PC discovered not just irregularities, but a blatant 100% deficiency rate in the audits that had been inspected by an industry watchdog. This finding indicates a complete failure to meet the standards expected of a financial auditor.

BF Borgers was listed as the lead independent auditor in a filing made by Trump Media as recent as April 17, but the firm has yet to respond to commentary requests regarding the suspension. The SEC has regulatory prerogatives that compel publicly listed companies to submit audited financial statements within 45 days following the conclusion of a quarter, pushing Trump Media's deadline to May 15. Nevertheless, there is a provision for a "limited extension of the deadline," should companies find themselves impacted by issues such as those currently entangling Trump Media & Technology Group.

Expected Delay in Financial Reporting

Expert anticipations suggest a considerable delay before any clarity emerges. Usha Rodrigues, a University of Georgia law professor and an authority on blank-check companies—the vehicle that brought Trump Media to market—predicts a waiting period of not less than 30 days to gain visibility on the social-media company’s financial report. This estimate, she tentatively extends, could stretch to an interval between 60 and 90 days.

Finance Professor Jay Ritter, from the University of Florida, foresees the potential for an even more prolonged delay, estimating that it could take several months before the audited first-quarter figures become publicly accessible. These prognoses paint a picture of an elongated timeline fraught with uncertainty for Trump Media's financial disclosures.

Complications with SPAC Mergers

The special-purpose acquisition company (SPAC) that facilitated Trump Media’s public listing, Digital World Acquisition Corp., was not immune to auditing snags itself. In the lead-up to finalizing the deal, the SPAC’s previous auditor, Marcum LLP—beset equally by regulatory complications—had resigned unanticipatedly in August.

Given the importance of historical financial information and the integrity of financial reporting, Trump Media's new auditor, whoever that may be, will undoubitably require a significant period to conduct due diligence and familiarize themselves with the already-public filings. Observers in the industry are bracing themselves to see whether a slow-moving, reputable accounting firm will take on the job or if an entity that is more at ease with risk will emerge to accept a high-profile and contentious client.

Regulatory and Compliance Updates

In the imminent future, Trump Media is expected to file a regulatory update acknowledging the absence of an auditing partner and the search for a replacement. The company, in the wake of the SEC’s crackdown, has stated its intent to collaborate with new auditing partners that conform to the orders handed down by the regulators. This declaration signals a commitment to navigate the challenging terrain of regulatory compliance and due process.

For further understanding of the SEC's allegations and the auditing firm's history of deficiencies, readers may access additional details through the link provided here.

Ongoing Engagement with BF Borgers CPA PC

It is noteworthy to mention that Trump Media had engaged with the Colorado-based accounting firm BF Borgers since 2022 and maintained its association post-public listing via Digital World Acquisitions. It should be pointed out, however, that inspections by the Public Company Accounting Oversight Board have not yet inspected any audits of Trump Media conducted by BF Borgers.

Examination of Financial Health and Valuation

Trump Media & Technology Group's lofty assessment, which floated around $8.2 billion, has been met with skepticism from parts of the investment community. This is in part due to the company's financial report disclosing just $4.1 million in income the previous year and a staggering loss exceeding $50 million. Yet, it remains one of the marketplace's most costly investments to short. The financing costs for those betting against the stock reach an astronomical annual rate of over 600%, implying that contrarians must see a share price decline just to break even.

The Fascination for Investors

Despite the challenges faced and the evident disconnect between the company’s fundamentals and its valuation, Trump Media has managed to captivate retail traders and Wall Street veterans alike. The dramatic fluctuations in the company's stock have drawn parallels with the meme stock craze that captured the financial world's attention in 2021.

The flurry of interest and intrigue surrounding the company even as it wrestles with financial transparency and regulatory compliance speaks to the enigmatic influence of its association with the former President and the broader narrative of political and social discourse that it seeks to engage with through its platform, Truth Social.

For more context on the skeptical view of Trump Media and the uphill battle faced by short sellers, review this article.

Seeking a Finance Narrative through Social Media

The paths of digital platforms and fiscal strategy are intersecting more prominently than ever before with Truth Social's arrival on the social media stage. As anticipation for its performance metrics burgeons, the establishment is wrought with curiosity over how it will navigate the interplay of market forces, investor sentiment, and the regulatory gauntlet it must pass. For a venture closely tied to a towering political figure, the stakes are perceptibly higher, and so appears the scrutiny.

Editorial assistance from Lydia Beyoud, Austin Weinstein, and Nicola M. White

The unfolding scenario around Trump Media & Technology Group has been documented and examined closely by various industry experts. With invaluable assistance from these professionals, including Lydia Beyoud, Austin Weinstein, and Nicola M. White, the ongoing narrative continues to develop and take shape. As investors, market spectators, and regulators alike keep their gaze fixed on the company's maneuvers, a collective breath is held in anticipation of what the future financial disclosures will reveal about the sustainability and profitability of Trump's media enterprise.

What Lies Ahead for Truth Social and Trump Media

The road ahead for Trump Media & Technology Group and its platform Truth Social is fraught with uncertainty and regulatory complexity. As it stands, the business’s inability to present its audited financial statements on time could be seen as a harbinger of deeper issues within. On the other hand, the delay may simply reflect the pains of transition as the company seeks new partners to ensure compliance and transparency in its financial reporting.

Investors and market analysts will undoubtedly remain vigilant, seeking any clues or indications of the company's direction and stability. The eventual revelation of financial results, whether delayed or punctual, will be a moment of truth for Trump Media. It will not only provide insight into the fiscal specifics of the company but also test the market's confidence in the brand and its offerings.

Truth Social's thrust into the public markets represents a novel blend of politics, technology, and finance. How it weathers the storm of regulatory demands and emerges in the financial limelight will undeniably draw significant attention and possibly set precedents for future media companies embarking on the journey of going public under similar circumstances.


The story of Trump Media & Technology Group serves as a contemporary case study of the intricate relationship between business operations, financial regulations, and corporate governance. The challenges facing the company underscore the importance of rigorous financial oversight and the repercussions of falling short in audit standards. As we await the company's move to begin trading on the Nasdaq stock market, it is worth noting that the unwavering scrutiny it faces may just be the litmus test required for reinforcing the integrity and resilience of public financial markets.

As we continue to follow the developments, the intrigue surrounding the future of Trump Media remains a focal point of discussion for investors, regulatory bodies, and the public at large. Its ultimate success or failure will speak volumes about the interplay between modern-day entrepreneurship, regulatory frameworks, and the ever-volatile sentiments woven throughout the fabric of the stock market.