Summary of Key Points
Trump's media and technology group, TMTG, is selling real-time data interfaces (APIs) for its social platform “Truth Social” to Wall Street's high-frequency trading firms. These firms can access posts from Trump and others several milliseconds ahead of the general public for a monthly fee of $100,000 (with a discount of around $60,000 for three-year contracts). The first 10 firms alone could generate revenue of $7-12 million, which is a lifeline for TMTG's struggling finances. However, this move has sparked strong criticism from regulatory authorities and Democratic lawmakers, who argue that it allows firms to gain an unfair advantage and potentially violates insider trading laws. TMTG defends the practice, claiming it is standard industry practice and that the information is already public.
1. Why Would High-Frequency Traders Pay Millions for Millisecond-Advances on Trump’s Posts?
You might wonder: Isn’t it just about reading a post? Why would firms spend $10,000 per month?
Trump’s posts can significantly impact the market. For example, in April 2025, his announcement to temporarily suspend additional tariffs caused the S&P 500 index to rise by 9% in one day. For high-frequency traders, milliseconds matter: they use automated computer programs to trade instantly, allowing them to buy or sell before price changes and profit from the difference. A simulated project called Trump2Cash once achieved an annual return of 59% by analyzing Trump’s posts. Therefore, these firms are willing to pay a hefty fee for this millisecond advantage.
2. TMTG Selling APIs: A Last-Ditch Attempt to Survive Financial Strains
How dire is TMTG’s situation? The numbers tell the story:
- In July of this year, Truth Social had only 260,000 daily active users, a 40% decline compared to its competitor X (formerly Twitter’s) 123.5 million;
- Revenue was just $1.7 million last quarter, but losses amounted to $238 million (mainly due to declines in cryptocurrency investments);
- The company has never made a profit in its three years of operation, with cumulative losses exceeding $1 billion, and its stock price has dropped 35% this year, significantly reducing Trump’s 41% stake.
Selling APIs is a high-profit opportunity for TMTG: the annual revenue from the first 10 firms alone equals 2-3 times their total annual income last year. They are not only targeting high-frequency traders but also discussing deals with cloud computing giants and news organizations, with plans to expand into retail sales—after all, any profitable business deserves to grow.
3. Regulatory Concerns: “Unfair Arbitrage” and Possible Legal Violations
Democratic lawmakers and regulators are outraged:
- Senators Warren and Schiff wrote to the SEC, stating that this allows institutional investors to profit from the president’s posts while ordinary retail investors and pension funds suffer losses, and questioning whether it violates insider trading laws;
- Representative Laskin called it an “arbitrage scheme,” noting that Trump’s posts often cover topics like tariffs, energy policy, and specific companies that can instantly affect the market.
How does TMTG respond? They argue that the information is public, and this practice is common in the industry (even Twitter sells real-time data). However, legal experts disagree: even if the posts are public, government officials may need to wait for the market to react before trading on the information; otherwise, it could be considered insider trading.
4. Historical Precedents: Thomson Reuters’ “2-Second Advance” Case
This isn’t the first time such a situation has occurred. In 2013, Thomson Reuters sent customers the Michigan University Consumer Confidence Index two seconds in advance for a monthly fee of over $6,000. The New York Attorney General investigated, citing it as a violation of market fairness, and Thomson Reuters discontinued the service.
TMTG’s situation is more sensitive since it involves the president’s posts with broader market impacts. Although the SEC has not explicitly stated it will investigate, given Thomson Reuters’ precedent, regulatory intervention seems inevitable.
5. TMTG’s Rescue Plans: Mergers, Crypto Adjustments, and a Gamble on the Future
In addition to selling APIs, TMTG is taking other steps:
- Resolving previous merger-related legal issues to reduce management costs;
- Planning a merger with energy company TAE Technologies in the fourth quarter to diversify its business;
- Adjusting its bitcoin holdings strategy to mitigate volatility (after significant losses in cryptocurrencies);
- Expanding its social media and streaming platforms in hopes of generating more revenue from users and content.
However, whether these measures will turn the company around is uncertain. With so few users and limited ad revenue from cryptocurrencies, selling APIs may be their most immediate source of cash flow. If regulators ban this practice, TMTG’s options will be limited.
Conclusion
TMTG’s sale of real-time data on Trump’s posts essentially transforms presidential social activity into a trading tool. For firms, it’s an opportunity for arbitrage; for TMTG, it’s a lifeline. But for ordinary investors, it’s part of an unfair market. Will regulators intervene? And will TMTG survive? These are the questions that remain to be answered. After all, turning the president’s social activities into trading signals is a highly controversial move.