The Publicly-Traded Presidential Candidate

Trump is about to pull off the biggest grift of his life, and the media is failing to report on the danger.

Photo: Stefani Reynolds / AFP via Getty Images

We’ve all been focused lately on a question appropriate for Schadenfriday: How is Donald Trump going to post a $450+ million bond to cover his appeal in the New York civil fraud case? The clock is ticking, and Trump claims he doesn’t have the ability to post it. According to his lawyers, over 30 companies have turned him down for financing sufficient to cover that sum. Attorney General Letitia James has begun the process of filing the judgment in counties where Trump has properties, including his Seven Springs estate in Westchester, New York.

But there’s a lifeline for Trump that could change everything. In fact, it’s far more than a lifeline; all of Trump’s personal financial problems may soon vanish, and he may become a real billionaire many times over, at least on paper, in one of the biggest grifts ever.

The con he is about to pull involves his floundering social media platform Truth Social, whose shares go public next week. The “SPAC” (short for “special purpose acquisition company”), which Trump is using to circumvent the normal IPO process, moments ago voted to merge with Trump Media & Technology Group. And it will begin publicly trading under the symbol “DJT.” 

The current trading price is around $43 a share, and Trump owns something like 79 million shares of it. At that share price, Trump’s holdings in the company are worth $3.4 billion. 

Let me repeat, $3.4 billion.

That’s a lot of money—far more than Trump has actually ever had at his disposal—so we need to unpack precisely what is going on. Specifically, we need to understand whether and when Trump will have access to those funds—a key question for his current financial woes—and whether that massive treasure chest will grow or shrink in the coming months.

Riding the meme stock wave

Truth Social is not a successful company, at least not yet. It had only about $5 million last year in revenue, and it had lost over $30 million through the third quarter of 2023. Its user base is paltry at just 8.9 million registered users, and it’s not very likely to grow into anything like the next Facebook or Twitter. 

So why is it valued so high?

There aren’t many institutional holders of Truth Social. Its shareholders are mostly individual investors, numbering some 400,000. But here’s where things get crazy. These investors are all fanatical about the stock and have pushed its value on paper into the stratosphere, despite no financial foundation. 

In short, Truth Social is part of the “meme” stock frenzy that helped lift shares of companies like GameStop to ridiculous valuations by using social media to hype the stock ever higher—before it crashed back down to earth.

Mighty rise, mighty fall

Truth Social is a speculative investment bubble that will reward those who can cash out at the high and punish those who are left holding the bag at the end. 

Trump is quite adept at this scam. He once sold NFT Trump “trading cards” to his base that went sky high before sales dropped 99 percent.

He also recently sold gold Trump sneakers for $399, selling out of them quickly before dropping the price. Resellers are now seeking to unload them at below $100.

In short, Trump took money from suckers, whom he convinced to buy in at the highest prices. They were left with something far, far less valuable once the dust settled.

And that is precisely what is going on with Truth Social. In fact, the value of the stock seems to rise proportionally with Trump’s own political stock. When he won the Iowa primary, the share price rose 60 percent during an 11-day period covering when Ron DeSantis dropped out of the race. 

And my own personal bugaboo: It hasn’t helped that deeply flawed polls like those published by the New York Times misleadingly show Trump beating Biden nationally by 6 points—even though most other polls lately show Biden actually ahead or tied. These headlines help convince speculators that their investment in Trump’s social media platform is solid when it is nothing but a house of cards.

The shareholders’ thinking appears to be that Truth Social will become very valuable if Trump becomes president. And sadly, there is reason to worry this might be true.

Foreign influence in a monetized president

It bears noting that after next week’s public offering, Trump’s personal net worth will be determined by the ups and down of a publicly-traded stock. Let’s think about what that means in real terms. 

Will there be any restrictions on who can own stock in DJT? Such limitations would be difficult to enforce, particularly if there are intermediaries or big funds involved. This means the Russians, Chinese and Saudis could each take huge institutional stakes in DJT as a publicly-traded company very much tied to the possible future president.

This would make the notion of foreign governments renting rooms at Trump hotels look quaint by comparison. Imagine come 2025 that big, wealthy buyers hold commanding stakes in Trump’s net worth, and he is now the president. What wouldn’t he do to stay in their good graces? Our jurisprudence around the Emoluments Clause isn’t set up to handle such a situation.

I’ve read many pieces about how Trump is set to be worth $3.4 billion more next week, but I’ve seen nothing so far warning of the dangers of a publicly-traded presidential candidacy. We are in wholly uncharted waters.

Lawsuits already abound

The SPAC merger was supposed to happen a long time ago, but surprise, surprise, the company missed several important deadlines and the merger got put off twice. Trump has been busy screwing his partners out of their shares, and they in turn have sued him. The SEC also even got involved and alleged insider trading violations and issued fines to the tune of $18 million. This is, like every Trump deal, not a pretty picture.

Still, there was enough money to be made for all the aggrieved parties, given the current incredibly high stock price, to push the merger through and to worry about how to divide up the pie later. The real question is how eagerly Trump moves to sell, transfer or stake his shares in the company, given his urgent need for cash today.

The lock-up period that is no lock-up at all

Normally, the founders, major shareholders and officers of a company listing its shares publicly are prevented from selling or even encumbering (meaning, offering as loan collateral) their stock for a period of six months. This rule prevents the shares from tanking due to pressures on the stock price following big sales. 

The agreement Trump, as a founder and majority shareholder, has with the company follows normal guidelines here. But these guidelines may be worthless because the company can amend the lock-out agreement if it wants to at any time, permitting Trump to sell or encumber his shares.

I can’t see any universe where Trump would be sitting on $3.4 billion (or much more if the stock rises in a MAGA buying frenzy next week) and not seek to change the rules so he could sell or at least put some big part of it up as collateral, in part to finance his appeal bonds and pay his lawyer fees, and in part perhaps to fund his campaign. This is an amount of money that is an order above what he has ever had in near-liquid form.

The danger he faces, of course, is that any movement to sell shares could cause other shareholders to panic and sell theirs as well. So Trump would have to be careful how he fleeces his flock so as not to cause a selling stampede.

And, again, it will be very interesting to see whether any investors looking to gain favor with or control the possible future president will take an interest in the shares, sending them ever higher.

A collapse?

On the flip side of the equation, if Trump starts to suffer bad news (e.g., a criminal conviction in New York, a loss of his immunity appeal before SCOTUS and the restart of his D.C. trial, a continued slide in national polling), then this could be reflected in the stock price of DJT. Speculators to the downside could begin shorting the stock, betting it will fall just as every other meme stock has. A lot of money stands to be made from people who bought a lemon at its height.

If the stock starts to slide, Trump will be tempted to sell even more of his controlling interest, thereby adding to the downward pressure on the stock. This will be true especially if he has to come up with over $500 million quickly to pay the state of New York.

To offset any sale pressure, Trump could seek to shore up the stock by bringing in some heavy hitter investors like his Saudi friends. They of course will have to balance their reluctance to put money behind a speculative bubble with the lure of having Donald Trump even more in their pocket.

But the bottom line is this: An investment scam like Truth Social can be fairly quickly and ruthlessly destroyed, and a stampede toward the gates can happen at any time just as it did with other speculative meme stocks. It’s usually just a question of when—and that “when” matters a great deal here.

A deep breath

If the merger is approved and the public offering goes well, we need to steel ourselves for headlines heralding the fact that Trump is now an actual billionaire many times over, with more than enough money to pay off his legal judgments. That sense that Trump always manages to escape consequences through yet another con, lie or grift will loom large, so I’m advising folks to prepare themselves mentally for it.

Deep breath, indeed.

But let’s remember this: Defeating Trump was never going to be straightforward. Most scenarios I have considered always entailed experiencing him rise to his greatest level of power and danger before we, the voters, bring him down. The more cornered he feels, the more vicious he will become. The idea that he would be a broken, defeated and weak opponent come November has always been more of a hope than what the facts on the ground suggest. 

The danger of Trump should never be minimized. He already has the levers of power of an entire political party now firmly in his grasp. And he has always been able to bamboozle his base into turning over their money and sometimes even their life savings to him. Truth Social is an extension of that power, using the twin tools of financial fraud and social media hype to achieve it. And Trump has always excelled in these two areas.

One final note. The media needs to do a much better job warning about the dangers of such a publicly-traded candidacy and possible presidency. This is a man who has always been up for sale to the highest bidder, and who will now abuse the meme stock frenzy to achieve shocking personal financial gain while exposing our nation’s highest office to massive financial leverage. The American people need to be warned of the dangers inherent in this, far beyond the probable dispiriting headlines next week that Trump really will have become a billionaire, at least on meme stock paper.