Rudy Giuliani launched the doomed effort to block Joe Biden’s 2020 presidential campaign in the worn-down Philadelphia venue. Initially, the Giuliani campaign was supposed to book the Four Seasons hotel. Still, a mistake led to Giuliani giving a speech in front of an industrial garage door plastered with Trump signs. Trump’s attempt to overturn the election was never more professional than that.
Trump’s new media company, Trump Media & Technology Group, may have the same amateurish viewpoint. In a recent “investor presentation” the company filed with the Securities and Exchange Commission, business analysts guffaw at its laughable evasions and lack of business strategy. According to Bloomberg analyst Matt Levine, “it does seem like every public action by this company is designed to give the impression that it is a joke.”
The most curious aspect of the TMTG presentation is the “technology team” listed on Slide 21. Despite filling 30 essential jobs, the company lists only the team members’ first names and last initials. “Josh A.” is the company’s chief technology officer. “Steve E.” is the company’s vice president of engineering. BJ is one of the senior mobile developers. Are these real people or stand-ins? “Personnel subject to change,” says a footnote.
Devin Nunes is a very well-known employee, the pro-Trump California congressman who leaves his job to become TMTG’s CEO in January. Nunes has no business experience other than fishy ties to a family farm. His social-media history is sketchy. As a result of Nunes’ loyalty to Trump, a parody account called @DevinCow started appearing on Twitter, prompting a lawsuit by Nunes, seeking to shut it down. When he lost last year, he encouraged his followers to join Parler, a conservative version of Twitter. If it ever becomes real, the Parler platform would threaten Trump’s.
Nunes As a Republican
In an increasingly liberal district, Nunes faces a tough reelection battle as a Republican. So joining Trump’s company now is better than losing in 2022. As the New Yorker noted in a piece of satire, Nunes’ employment with Trump is not without risks, speculating that Trump will stiff him, as he has done with contractors and investors in the past. Maybe it’s not satire after all.
Trump is a serious business venture with real money at stake.
TMTG & DWAC Merger
TMTG plans to merge with a special-purpose acquisition company (SPAC) called Digital World Acquisition Corp., which has raised roughly $1 billion for the deal. In normal circumstances, a public company would disclose who its investors are, which DWAC will have to do at some point. At the moment, however, those investors remain anonymous. In addition, after news of the Trump merger broke in October, two hedge funds that had invested in DWAC pulled their money.
The TMTG-DWAC partnership is already having problems. Patrick Orlando, DWAC’s chief executive, met with Donald Trump early in 2021, before the company went public and raised funds as a SPAC.
SPACs aren’t supposed to have specific target companies in mind when raising funds, so discussing the same deal that happened would be against the rules. SEC investigators may impose fines or sanctions or find no wrongdoing at all.
DWAC investors can purchase shares below market value if the merger is successful, then sell them immediately, essentially guaranteeing a profit. However, that’s not necessarily good for the stock or the company. Those who want to cash out right away-and have negotiated the right to do so-have no stake in the business’s future. Investors might even believe that the real opportunity lies in cashing in on the initial hype rather than profiting long-term.
TMTG Investment Plan
It is unclear how TMTG plans to make money in its investor presentation. It notes that Trump’s 89 million followers on Twitter before Twitter banned him in 2020 is more than a third of Netflix’s entire subscriber base, suggesting that TMTG can rival Netflix right out of the gate. However, apples and oranges are two different things. Twitter accounts are free for the account holder and followers alike, in contrast to Netflix accounts, for which they charge a monthly fee.
You can also find a variety of other oddities. A Morning Consult survey, not any internal analysis, forecasted 81 million monetizable users by 2026. We represent the forecasts for subscriptions and revenue in most business proposals by question marks. Not by the actual numbers (even if they are inflated). The EF Hutton logo appears on every page, but this is not the legendary brokerage firm. EF Hutton is a revival of Kingswood Capital Markets, a brokerage that dates to 2020. This gambit has worked.
Even though his current company is under investigation for fraud, Trump considers himself a business icon. Over a thousand lawsuits and six bankruptcy filings have marked his business history. Rather than being a builder or dealmaker, Trump’s real success has been a reality-show entertainer. It may be possible for Trump’s new company to turn Trump’s jocular mendacity into steady profits. But it could also become little more than a Trump fan club that amuses outsiders from time to time.
