© Stocksak. FILEPHOTO: This picture illustration, taken February 21, 2022, shows the logo of Truth social network behind a woman who is holding a smartphone. REUTERS/Dado Ruvic/Illustration
Helen Coster, Krystal Hu
(Stocksak.) – Eversince former President Donald Trump founded a new media company to compete with Twitter, it has been a mystery who provided the money. Trump didn’t. So who did it?
Lawyers representing William Wilkerson have provided some answers to the whistleblower claim against the media company and Digital World Acquisition Corp. This blank-check firm is now taking it public.
The documents show Truth Social’s early backers include six businessmen outside of the Silicon Valley mainstream — including two executives from an oil company and a gym chain, several Republican donors, a former U.S. ambassador to Portugal and the head of a mail-order fruitcake company.
The involvement of the previously unnamed financial backers of Trump Media & Technology Group (TMTG) – parent company of social media app Truth Social – shows how Trump tapped his political supporters to launch an outlet aimed at political conservatives and libertarians after he was banned from Twitter and Facebook (NASDAQ:) following the Jan. 6, 2021 attack on Congress.
Representatives of former President Trump and TMTG didn’t respond to a request to comment on the names of investors in the documents. These documents were submitted to the SEC by Wilkerson and other parts of the story.
Digital World Chief Executive Patrick Orlando and TMTG Co-founders Andy Litinsky & Wes Moss, who were named in the whistleblower lawsuit, did not respond.
The investors’ involvement in TMTG, gleaned from promissory notes dating from between May 2021 and mid-2022, provides new details on the venture which, as Stocksak reported, has struggled to attract tech talent and corporate partners. These names have not been reported before.
According to the documents Karl Pfluger, president and CEO of Midland, Texas’s oil and energy company Oryx Midstream Services, owned by Stonepeak Infrastructure Partners, contributed $5.3 million in December 2021, and another $4.5 million in March 20,22. Pfluger is the brother of August Pfluger, a Republican Congressman in Texas and vocal Trump ally who first earned Trump’s endorsement in February 2020.
In a statement to Stocksak, August Pfluger’s spokesperson said he doesn’t have a personal investment in Trump Media & Technology Group, adding: “He earned the endorsement of President Trump long before the creation of Truth Social.”
Patrick Walsh, chief executive at the holding company that owns luxury gym brands like TMPL, Palm Beach Sports Clubs and LIV, invested a total $6.2 million between December 20,21 and February 20,22. According to a May SEC filing by DWAC, he had previously worked with Phillip Juhan who was the financial chief of Town Sports (OTC) International Holdings before Juhan left to assume the same role at TMTG.
Texas telecom billionaire Kenny Troutt was a vocal Trump supporter and invested $4 million through Nicholas Merrick, his money manager. He donated $200,000 to the Trump campaign in 2016, and another $925,000 to Trump’s 2020 re-election campaigns, according to publicly available campaign finance data.
Roy Bailey, the chief executive officer of Bailey Deason Capital Investments in Dallas, Texas and the national co-finance chairman of Trump’s 2020 re-election campaign, invested at least $200,000 between May and October 2021.
George Glass, a real estate developer from Oregon and Trump fundraiser, served as the U.S. Ambassador to Portugal. The Trump administration invested $500,000 in the Ambassador to Portugal, George Glass. Bob McNutt was the chief executive officer at a Corsicana, Texas, mail-order fruitcake firm. Another $100,000 was also invested that day. McNutt has been a Trump supporter for many years.
Bailey, Pfluger, McNutt, Glass, Walsh and Troutt didn’t reply to requests for comment.
The $22.8 million in financing from these backers – who operate largely outside the ecosystem of venture capital investors that tech startups often tap – is part of the $38 million of debt TMTG raised since May 2021, according to SEC filings.
TMTG launched Truth Social in February in the Apple (NASDAQ:) App Store and in Google’s Play Store in October.
TMTG announced a deal with Digital World Acquisition Corp. (DWAC), a special-purpose acquisition company (SPAC) to merge. The deal is currently in doubt due to investigations by the Department of Justice (SEC), which delayed its closing.
The Washington Post and The Miami Herald first reported details about the whistleblower complaint, which was based upon Stocksak’s cache documents.
If TMTG’s deal with Digital World closes, TMTG would gain access to over $1 billion in cash from DWAC’s institutional investors, such as hedge funds. According to a Feb. 2, 2021 service agreement, the former president holds 90% of TMTG.
Through a spokesperson for TMTG, the company’s legal department did not comment on the investors but said that Trump hired TMTG Chief Executive Devin Nunes, a former Republican congressman, to create a “culture of compliance and build a world-class team to lead Truth Social.”
SPACs, publicly-traded companies, are created for investors to pool money in the hopes of merging or acquiring a private company.
The documents provided by the whistleblower’s attorneys also include four additional promissory notes collectively worth $9.4 million from entities whose identities Stocksak is not able to verify.
The notes are a type of short-term debt that can convert to shares of company when TMTG goes publicly. The documents show that investors will receive shares of company at half the price stock will trade at and can sell them immediately.
TMTG fired Wilkerson on Oct. 13, claiming that he violated his non-disclosure agreement by sharing information with media outlets, according to a letter from a TMTG lawyer to Wilkerson, shown to Stocksak by Wilkerson’s lawyers, Phil Brewster, Patrick Mincey and Stephen Bell.
Although Truth Social has experienced a surge in interest, its user base is still small compared to the growth targets TMTG set in November when the company promised investors that the app would have 56 million users by 2024, and 81 million by 2026. According to Appfigures market tracker, Truth Social was downloaded 2.9 millions times across both platforms.
As of Oct. 27, Trump had 4.37 Million followers on Truth Social, compared to the more that 88 million followers he had when he was permanently suspended from Twitter.