Trump’s Massive Truth Social Windfall
He's suddenly a billionaire after all.
Yesterday, I stumbled on a Bloomberg report headlined “Trump’s Net Worth Hits $6.5 Billion, Making Him One of World’s 500 Richest People.” It’s paywalled but its teasers were:
- Former president joins Bloomberg’s list of 500 richest people
- Trump Media merger adds billions of dollars to paper fortune
Today, other papers are providing more insights.
WSJ (“Truth Social Stock Price Surges on First Day of Trading, Increasing Trump’s Fortune“):
Shares of Donald Trump’s social-media company surged 40% on their first day of trading, boosting the presidential candidate’s fortune. The question is, how soon can he tap his roughly $5.5 billion stake in Truth Social?
That is up to the board of Truth Social’s parent company. The group includes his son, three former members of his administration and the former congressman who took a leading role in defending the former president in his first impeachment trial.
So, pretty quickly, then?
Truth Social’s parent company began trading Tuesday under the ticker DJT, Trump’s initials. Its shares soared after the opening bell, giving it a market value of roughly $9.5 billion. The gobsmacking stock price makes Trump’s approximately 60% stake worth approximately $5.5 billion. Those values will continue swinging with the stock price.
Trading was so intense that Nasdaq temporarily halted trading.
Why people would pay so much for something with no ostensible investment value would be an interesting question were in not for the identity of the chief stakeholder.
The timing couldn’t be better for Trump. On Monday, a judge ruled that Trump can pay $175 million to put his $454 million civil-fraud judgment on hold during his appeal. Trump hadn’t been able to get a bond to cover the whole judgment.
The $175 million is a fraction of Trump’s newfound wealth, but his shares are just out of reach. Typically, people involved in the type of deals that brought Truth Social to the stock market aren’t allowed to sell or borrow against their shares for six months.
The seven-member board would need to grant Trump a waiver if he wished to make such moves before then. That isn’t unheard of, but boards typically wait a month or more before letting a big owner sell. They risk setting off a flood of selling that could cause big losses for independent investors.
But boards tend to be rather more independent than this one.
If the board grants Trump a waiver, company rules will limit how much he can sell. Based on the trading volume of the company taking Truth Social public, Trump could still be allowed to sell at least several hundred million dollars worth of stock over a three-month period.
The seven-member group includes Donald Trump Jr. and three former members of the Trump administration: former U.S. Trade Rep. Robert Lighthizer; Kash Patel, a former White House and Pentagon aide whom Trump late in his term considered naming to top positions at the Central Intelligence Agency and the Federal Bureau of Investigation; and Linda McMahon, former head of the Small Business Administration and co-founder of World Wrestling Entertainment with her husband, Vince.
Devin Nunes, the chief executive of Truth Social and a former congressman who defended Trump on the House Intelligence Committee, is also a director. The head of the shell company taking Trump’s firm public, Eric Swider, and a longtime lawyer named W. Kyle Green round out the group. Swider and Green’s ties to Trump aren’t immediately clear.
Several hundred million dollars could come in handy. And, again, I’d be shocked if this group of toadies stood in the way. And, again, this isn’t exactly an ordinary investment vehicle:
Granting Trump a waiver to sell could be risky for the board because he is by far the largest shareholder and the main reason individual investors have been buying the stock. Any signal that he is selling or likely to sell could dent the share price and fuel concerns about Truth Social’s future.
But this is the world of Donald Trump, where things can be upside down. Trump is getting this huge windfall because his supporters have banded together on social media to push up the stock. Shares of the SPAC that became Truth Social rose 35% on Monday and had surged in advance of the deal closing.
These investors want to help Trump. So rather than dump the stock, they could cheer his sales. By keeping the share price high, they could help Trump even more. The former president could receive tens of millions of additional shares if the stock stays above certain levels in the coming weeks.
Indeed.
Many professional investors say the stock is disconnected from the reality of Truth Social’s business, which posted about $5 million in sales and tens of millions in losses from its 2021 launch to September 2023. That could fuel extreme volatility in the share price in the coming months.
“Anything Trump does tends to get an extremely high level of scrutiny,” Marvin said. “This will be no different.”
You don’t say.
MSNBC’s Ja’han Jones (“Jeff Yass just bought Trump. Here’s what he stands to gain.“) contends it’s more than just a bunch of Trump enthusiasts.
Billionaire investor Jeff Yass is playing his Trump card.
The Philadelphia Inquirer reported Friday that the right-wing megadonor and major TikTok investor is a part owner of the company that merged with Donald Trump’s media company, which owns Truth Social, the former president’s struggling social media platform. The head-scratching deal stands to add billions of dollars to Trump’s net worth.
Yass’ name recently started popping up in news reports after Trump denounced legislation in Congress that could ban TikTok unless the social media outlet is sold from its China-based parent company. This was a major reversal of Trump’s previous opposition to TikTok and came after Yass met with Trump in Florida, with the backdrop of the former president’s mounting legal fees only adding to suspicion that Yass essentially could be purchasing a presidential candidate.
Trump claimed afterward that he hadn’t spoken with Yass about TikTok, and Yass is a major backer of efforts to promote school privatization, so I guess it’s possible that the right-wing billionaire didn’t say a thing about one of his most prominent investments. (Yass recently declined a request for comment from NBC News.)
But it certainly looks like Trump is under Yass’ thumb now.
It also looks like TikTok — or at minimum, one of its key investors — has just tried to one-up other social media companies in Big Tech’s ongoing battles over influence in Washington. Two years ago, The Washington Post revealed that Meta, the parent company of Instagram and Facebook, had waged a behind-the-scenes pressure campaign that involved trying to get media outlets and lawmakers to scrutinize TikTok more heavily. And although Meta can’t take total credit, that effort does seem to have helped get us to the present-day scenario, with a possible TikTok ban under consideration at the federal level and several other bans enacted at the state level.
With Trump, Yass appears to be employing the oligarchic approach to protecting an investment: transfer heaps of cash to a desperate presidential candidate and hope they do your bidding.
I must admit to have paid little attention to Yass and having been unaware of his role in Truth Social. Here’s what a NYT report (“Big Republican Donor Jeff Yass Owned Shares in Trump Media Merger Partner“) said about it in yesterday’s paper (Section B, Page 4, incidentally):
Jeff Yass, the billionaire Wall Street financier and Republican megadonor who is a major investor in the parent company of TikTok, was also the biggest institutional shareholder of the shell company that recently merged with former President Donald J. Trump’s social media company.
A December regulatory filing showed that Mr. Yass’s trading firm, Susquehanna International Group, owned about 2 percent of Digital World Acquisition Corporation, which merged with Trump Media & Technology Group on Friday. That stake, of about 605,000 shares, was worth about $22 million based on Digital World’s last closing share price.
It’s unclear if Susquehanna still owns those shares, because big investors disclose their holdings to regulators only periodically. But if it did retain its stake, Mr. Yass’s firm would become one of Trump Media’s larger institutional shareholders when it begins trading this week after the merger.
Shares of Digital World have surged about 140 percent this year as the merger with the parent company of Truth Social, Mr. Trump’s social media platform, drew closer and Mr. Trump became the presumptive Republican nominee for president.
So, a company in which Yass has an unspecified stake holds 2% in another company that just merged with Truth Social. That makes Yate’s role much murkier.
Still, the fact remains that Trump is getting a massive influx of cash at a particularly opportune time. Presumably, there are some strings attached.
So he’s creating monetary value out of thin air by simply declaring it, in order to pay off his legal fees for that very crime. It’s the capitalist version of the definition of chutzpah.
Couple of thoughts:
1. A whole lot of people, both stupid and not stupid, are going to lose a ton of money;
2. This all sounds like a giant tax problem on top of a giant disclosure problem on top of securities fraud.
3. This whole thing is a perfect encapsulation of why we should be taxing rich people until their eyes bleed. I don’t mean rich people like Daddy Reynolds, he’s at least hustling for his dough. Rich people like him are adding value to this world. Rich people like Yass are adding nothing but a bunch of bullshit and problems. Rich people should be tax to a level where they no longer have the resources to create huge problems.
This is literally just wealthy people/govts handing money to Trump. As a business, this entity has negative actual value – reporting losses of $49 million off $3.4 million in income. People will end up the same as those who bought into his casino stock (which went bankrupt in 9 years but netted Trump $40 million/yr as CEO before licensing deals) or his hotel stock (bankrupt in 5 years).
At this point, if it were actually about money, nobody would do business with him. It’s all about the hope for access.
An astounding valuation for a company that, in round numbers for the most recent quarter with figures available, lost $30M on revenues of $5M.
Trump can’t sell or borrow against his shares for six months. I give the same advice I give for most little tech outfits that go public to great fanfare: wait six months and then short the hell out of it.
Yass also donated $6M to Greg Abbott to push school vouchers. Many anti voucher State Representative Republicans were defeated in the primaries.
Given that there are others, beside trump who are looking to make money on this scam, and they are on the board, trump getting a pass on the 6 months isn’t guaranteed. And if it happens, there is a good likelihood of a share holder law suit, tying up any sale.
Short sellers around the world are looking at this as a huge payday and when trump does begin selling, the company’s value will crater.
Creating wealth out of smoke is what markets do. Bitcoin, gold, etc are intrinsically worthless, but they have market value. Amazon was selling for huge amounts compared to revenue for years. Our system is designed to let the elites make money out of nothing. That is how things work. Trump has been able to squeeze himself into a good place on the trough.
@Beth:
There’s a different between rich and wealthy. I forget the exact quote but it’s something along the lines of rich is what a person can achieve through work, good luck and circumstances in a lifetime. Rich as a status can be lost. Wealthy on the other hand comes from obscene generational gains, exploitative systems and immoral means. You either are wealthy or become it through social climbing- you can’t earn it on your own. You can’t stop being wealthy short of something catastrophic like the collapse of an economic system; hell, Bezos lost half of everything he has in a divorce and is still insanely wealthy
Rich is what sports players are when they go out to perform, wealthy is the guy who owns the team and pays them.
This is important because the wealthy like to pretend that taxes aimed at billionaires will hurt everyone with money in the bank. Since rich can be lost, they use scare tactics to make it sound like the government’s coming to steal all your stuff when the people it’s aimed at wouldn’t even notice if we robbed 2 or 3 of their properties blind.
Trump meanwhile doesn’t even have enough to pay the reduced amount the court wants. In fact, being in the 500 now means he has ZERO reason to not pay the full amount, let alone the gimme he just got. The court doesn’t take stock either so it will be cash or property, Donald. The bill is still due in a week……
This is just barely-veiled campaign donation.
If that weren’t enough, Trump is now hawking MAGA bibles for the low, low price of…$59.99. This seems to be a joint venture with Lee Greenwood.
It’s called the “God Bless the USA” Bible. In large print for E-Z reading!
I am not kidding: http://www.godblesstheusabible.com
@KM:
Judges will find a way to let Trump off the hook again.
Because he could not afford a $3,000 bond, New York infamously threw Kalief Browder, a black 16-year old from a poor family with no resources, into Rikers in 2010 without trial for three years after he was racially profiled and accused without evidence of stealing a backpack. Browder spent 800 days in solitary confinement and died by suicide at age 22, two years after release.
But rapist, terrorism-inciting fraudster Trump yet walks free among us, receiving bond leniency from the courts as his corrupt, rightwing Supreme Court seeks to indefinitely delay his trials. While we are simultaneously told Wall Street shenanigans have today made Trump one of the planet’s 500 wealthiest people. And while a majority of white voters and supermajority of white male voters (who we must never, ever blame for their selfish, shitty, and stupid electoral choices) try to make this unfit and unqualified orange thug president again.
Black Americans know all about what lawfare looks like, in this, our supposedly not systemically-racist country. Lawfare is most assuredly not the special treatment and affirmative action for mediocre white men that Trump’s receiving.
You know, for someone so hung up on appearances, Lardass certainly went for a hideous avatar.
Yesterday, I briefly thought of a use for Blockchain — I think there would be a premium for stock that was once owned by Donald J Trump himself, and Blockchain could be used to provide the provenance of the stock. Because it’s totally not a cult, but it has a lot of overlap with cultish behavior or at least memorabilia.
For a certain class of people, there’s a value add in knowing that Trump personally owned something. (I will never understand why his suit from 1/6 was not cut into pieces and sold as trading cards, or his inaugural suit from the American Carnage speech)
But today it occurs to me that they could just have two equal classes of stock, with different ticker symbols, and make all stock issued to Trump have a special symbol. DJT and DJT45 or something.
So I still have yet to find a use for Blockchain. I suppose the Blockchain solution has the entire ledger, so you can see how close your share is to Trump, and how many grubby little people owned it between Trump and you.
Anyway, the real problem with the Trump Social windfall is that not enough gets into the grubby little short fingered hands of Donald Trump. It’s a good grift, but could have done better.
I smell bribes, pay offs, money laundering, etc etc A whole lot of Saudi and Russian money.
@Kathy: He looks like one of the edgy late-80s to mid-80s knock-off versions of Captain America put in to show that America is the enemy.
I was thinking USAgent, but a Google search is dragging me towards Image comics SuperPatriot. Someone had that face paint in something much more prominent than Image.
(Google, Google, Google)
Ok, from Frank Miller’s Daredevil run, we have Nuke. I think I was thinking of Nuke. Not a prominent character, but a bit character in a classic run of comics.
https://en.m.wikipedia.org/wiki/Nuke_(Marvel_Comics)
Anyway, that avatar should be a warning to any reasonable person.
The ghosts of Charles Ponzi and Bernie Madoff are laughing at the fact that the “something for nothing” con still works. Trump’s stock is worth $5.5 billion because….why? It’s ownership in a company that loses money and is overseen by his relatives and clowns, and is nothing more than a vessel through Trump barks at the moon. Sounds like a great investment for the owners of pet rocks and beanie babies.
Trump Taj Mahal 2024
@Gustopher:
Nasty. But less ugly than Lardass.
@KM: The rich vs wealthy bit was one of Chris Rock’s best.
@Kathy: @Gustopher:
I think that’s Trump’s sad attempt at looking stern and tough.
Planning on shorting the stock. Expect it to rise a bit more first.
Steve
Here are two alternatives to Trump’s overpriced holy book.
The New Jefferson Bible: The Life and Morals of Jesus of Nazareth in Modern English
Asimov’s Guide to the Bible
I’m sure there are religious organizations that will give you a free Bible.
@Mister Bluster:
Now what good is a Bible if you can’t make money off it?
Welcome to the Trump Laundromat.
This is exactly what I thought would happen. He couldn’t gets banks or insurance companies to agree to make loans that he could not, or would not willingly, pay back, so he ‘leveraged’ his social media company’s negative value into … more instant wealth. Innovative grifting.
I’m reminded of a pyramid scheme.
Long ago, they were in vogue in Mexico. I was pitched a few, one from a family member. I was young and stupid, but I saw at once there was no investment, no means of producing value, nothing but transferring about the equivalent of $500 USD to someone in the hope that 10 or fifteen someones would each transfer their $500 to you. It should run well enough, until getting ten or fifteen more people into the scheme for every person paid off becomes impossible.
The Orange Xitter ins’t like that, but it’s close. The shares are real and represents real bits of a real company, but the value is what tons of people think it is. While the latter is true of lots of things, when not backed by real value and a steady and relatively predictable cash flow, such high valuations tend to collapse, like a pyramid scheme.
Those who manage to sell soon, while the share price is high, will make a killing. When there are no buyers willing to pay those prices in order to hold the stock long term, the price should collapse. So maybe more like tulips or beanie babies.
I say should, because it’s entirely possible the donor class and foreign governments may pump money in to keep the value up. it’s near certain the deplorable class will want to get as much as they can, too. But no one pumps money on a losing stock forever.
Again, it should collapse in November, should America remain sane long enough to deny Lardass a second try at wrecking the country.
@Kathy: It’s interesting how the white vertical stripes emphasize his jowls. One would think he would have avoided that.
One little-reported part of this is that “Truth Social” is just an instance of the open source social media network mastodon, set up as an isolated instance. Truth Social has ~5 million active members, and is supposedly worth 5 billion dollars. mastodon.social, the largest single mastodon instance, has ~2 million active members, and is supported by a Patreon that generates ~$23,000 a month.
And as far as anyone can tell, Truth Social forked the mastodon source code three years ago, and is years behind in code updates and the like. Meaning it’s almost certain that it’s been thoroughly infiltrated and hacked by now.
The Carpetbagger can’t help himself… somehow Bone Spurious will find a way to make this whole venture implode.