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.
