A very liberal friend messaged me on Friday. He had just heard the news of the more than $350 million civil fraud verdict against Donald Trump in New York.
That’s on top of the tens of millions he must pay to former magazine columnist E. Jean Carroll, who was found to have raped and then defamed.
Also: Jury says Donald Trump must pay another $83.3 million to E. Jean Carroll in defamation case
My friend thought that, at least financially, Trump was in trouble.
She’s not alone. Much of the media seems to have the same opinion.
They couldn’t be more wrong.
Away from the headlines, Donald Trump just made a disconcerting sum of money, all thanks to the advertising of his campaign for the White House. (A terribly, terribly cynical person might even suggest that this is part of the point.)
How much? Forget about these fines, which total less than $500 million. Trump is suddenly on track for a windfall of nearly $4 billion. And he’s made most of it in the five weeks since his big win in the Iowa caucuses put him in pole position for the Republican presidential nomination.
The windfall comes from the upcoming IPO of his social media platform, called Truth Social, which he launched – to massive derision from the mainstream media, I might add – in 2021 after being kicked out of Twitter following the events of January 6th. 2021.
Truth Social received approval for its IPO from the Securities and Exchange Commission this week.
Opinion: Stocks linked to Donald Trump’s Truth Social platform are flying high. Read this before investing.
Read also: DWAC rises more than 15% as it prepares to acquire Trump Media & Technology Group, but here’s a potential snag
It will come to the stock market through a merger with the so-called blank check, or “shell,” company known as Digital World Acquisition Corp. DWAC,
(Blank check companies are paper companies that first go public on the stock market and then have a prescribed time period to find a company to acquire or merge with.)
Under the terms of the deal, scheduled to start in 2021, Trump personally will end up with 79 million shares of the company once the deal is completed, possibly as early as this quarter.
Or so says a new document filed by the company with the SEC, on page 309.
The value of those shares today: $48. They lost $2 on Friday, but only after a phenomenal run that took them up from just $17 in early January, just before the Iowa caucuses.
(Let’s add that Devin Nunes, the Trump follower and former Republican congressman from rural California and CEO of the holding company Truth Social, will fare more modestly. At current prices, his shares will be worth, er, $5 million.)
That values Trump’s personal stake in the company at $3.8 billion – up $2.5 billion just after winning Iowa over Ron DeSantis and Nikki Haley, et al. Who says that costs money to run for president?
The stock boom is doubly welcome to Trump. It not only means that the value of his shares increases, but it means that he gets even more shares. Under the terms of the deal, Trump and his Truth Social partners get 40 million extra shares – current value: $1.9 billion – if the shares stay above $17.50.
Nobody knows how much the stock is really worth. It’s a speculative investment, to put it mildly, even a meme stock. It could easily fall to Earth. But as long as it stays above $17.50, Trump is in the pink.
There’s no mystery as to why the stock is booming. Some traders are riding Trump’s new hype train as he marches toward the Republican Party’s presidential nomination — and, quite possibly, the White House again.
And many are betting that if Trump becomes president again, in his second term he will do for Truth Social what he did for Twitter in his first.
In case you’ve forgotten, Trump actually used his Twitter account as a semi-official presidential communications tool. You couldn’t follow politics without following him on Twitter. In fact, you couldn’t really follow the news. His tweets have permeated the culture, as when Andy Serkis, the actor who played Gollum in “The Lord of the Rings,” read some in character on late-night TV.
In total, Trump tweeted more than 25,000 times during his four years in office, an average of more than 18 times a day.
Twitter’s value tripled during Trump’s four years in office. When he left it was worth 40 billion dollars. (There were many factors involved, but all this free publicity, courtesy of PT Barnum in the White House, certainly didn’t hurt.)
Trump’s new windfall from Truth Social comes at a convenient time for him. She will face not only huge fines, but also mounting legal fees. She currently faces four criminal trials, involving 91 charges.
Two are for allegedly trying to overturn the result of the 2020 election, in which he lost to Democrat Joe Biden by more than 7 million votes and a 306-232 count in the Electoral College. One is for alleged mishandling of classified documents after leaving the White House. The fourth, for allegedly paying money in secret to porn star Stormy Daniels during the 2016 presidential campaign, is scheduled to begin next month.
See: The checks that led to Trump’s first criminal trial in the ‘hush money’ scandal
As I have pointed out previously, Trump would not be facing this trial at all if he had paid Stormy Daniels with gold coins instead of checks.
However, getting access to his new billions in Truth Social to help him pay his legal bills will be a challenge. Presumably, Trump will be able to borrow his shares if necessary. Lawyers involved in the settlement declined to comment. The phone number listed for Digital World Acquisition Corp. in company filings has been disconnected. Emails sent to the media relations address were bounced.
Trump, remember, was trailing Florida Gov. DeSantis in the presidential race until the first of his legal charges came down.
See: Trump’s indictment increases the odds that he will be the GOP presidential nominee in 2024. You bet.
See how this whole thing fits together? The establishment blames Trump. The publicity gives him an unassailable lead in the Republican presidential race. This gives him a windfall of $4 billion. And he can funnel some of that money – through fines and legal fees – back to the establishment. The cost of doing business.
A truly cynical person might wonder if everyone is in agreement. And the rest of us are made fun of.