With Donald Trump, there is no bottom, and there never has been. The writer Kurt Andersen has declared Trump to be the “greatest self-parodist of all time.” And who can argue? There’s something utterly absurd about an a-religious former president selling $60 Bibles in an infomercial-style video on Easter weekend. Over the course of his decades in the public eye, Trump has been shameless about hawking everything from steaks and wine to bogus university educations.
Now he has found a new low: on March 26, the deceptively serious-sounding Trump Media & Technology Group Corp. (T.M.T.G.), the parent company of Trump’s social-media micro-platform, Truth Social, went public on the NASDAQ under the symbol DJT.
You may recall that the management of what used to be known as Twitter kicked Trump off its platform on January 8, 2021, for fear that his tweets would incite additional violence after he instigated the Capitol insurrection two days earlier.
Soon after Elon Musk bought Twitter, for $44 billion in October 2022, and renamed it X, Trump was reinstated to the platform, where he still has 87.3 million followers. But he has only tweeted once since then, last August 24, when he posted a picture of himself after surrendering to authorities in Atlanta to face criminal charges for conspiring to overturn his election loss. He wrote underneath his menacing mug shot, “ELECTION INTERFERENCE NEVER SURRENDER!” and then used it to raise a fresh $7 million in campaign contributions.
By then, two former contestants on The Apprentice, Andy Litinsky and Wes Moss, had pitched Trump on the idea of a Trump-branded social-media company, and Truth Social was born, with Trump owning initially some 90 percent of the shares of the business.
As with most Trump businesses, it was essentially a licensing arrangement. Trump and his partners created T.M.T.G. on February 8, 2021, just weeks after Biden’s inauguration, which Trump didn’t attend.
In filings with the Securities and Exchange Commission, Trump spun the creation of Truth Social as “aiming to disrupt big tech’s assault on free speech by opening up the Internet” and “giving the American people their voices back.” Mostly, though, Trump Social has been his way of getting his voice back and profiting from grammatically challenged, all-caps diatribes. “I LOVE TRUTH SOCIAL. IT IS MY HOME!!!” he wrote on the platform after he was allowed back on X.
But, in truth, Truth Social has largely muted Trump. He has fewer than seven million followers there, a fraction of his X following. The platform itself has just under nine million “sign-ups,” according to S.E.C. filings, and five million “active users.” And as of late march, there are only half a million active users.
By contrast, Musk’s X still has more than 500 million active users. Meta, which owns Facebook, Instagram, WhatsApp, and Threads, a Twitter-like product, has nearly four billion active users across its various apps.
In truth, Truth Social has largely muted Trump. He has fewer than seven million followers there, a fraction of his X following.
And then there is the fact that Truth Social and T.M.T.G. make no money. In 2022, its first year in business, Truth Social had less than $1.5 million in revenue and an operating loss of $19.3 million. In 2023, Truth Social had $4.1 million in revenue and a net loss of $58.2 million. In other words, as a business, Truth Social is a train wreck. Which is precisely what made it ripe for a little financial engineering, Donald Trump–style.
During the pandemic, Wall Street smart alecks resurrected a long-dormant financial product known as a SPAC (Special Purpose Acquisition Company). The idea behind a SPAC is that a group of deal-makers create a shell company with no real business or purpose to it other than to find a deal to do. Once it successfully raises money from the public markets, the shell company has to use the funds to buy a private company with a real business and merge it into the shell company. Et voilà, a newly minted, publicly traded company.
Even though they were dicey, SPACs were S.E.C.-approved, so there was a bonanza for a time. In 2019, the year before the craze started, SPACs raised less than $9 billion from investors, according to S.E.C. data. In 2020 and 2021, more than $240 billion was raised through SPACs. Now the fad is on the wane—according to SPAC Track, there were 861 SPAC I.P.O.’s in 2020 and 2021, but only 86 in 2022, and fewer still in 2023. Many SPACs have either gone bankrupt after finding a merger partner or returned the money they raised to investors, with interest, after failing to combine with another company.
In December 2020, two wily characters—Patrick Orlando, an M.I.T. graduate and former derivatives trader at Deutsche Bank, and Luiz Philippe de Orléans e Braganza, a member of Brazil’s National Congress and a former Lazard and JPMorgan banker—founded a SPAC they called Digital World Acquisition Corp., or DWAC. In September 2021, DWAC completed both its I.P.O. and a separate private placement of equity, raising a combined total of $293 million from investors. Orlando and Orléans e Braganza then had two years to find a private company to buy.
Enter T.M.T.G. Even before DWAC had completed its I.P.O., in September 2021, Trump’s representatives had been in touch with Orlando to see if T.M.T.G. would be a good merger candidate for one of Orlando’s other SPACs. A combination didn’t work out for numerous reasons, but discussions between the parties continued, and, over time, Orlando was successful in squelching the dissent in his own boardroom about doing business with Donald Trump.
A deal was finally signed between DWAC and T.M.T.G. on October 20, 2021. The next day, after the announcement of the merger with Trump’s fledgling social-media company, DWAC’s stock price rose 357 percent, an outlandish overvaluation even by peak SPAC-boomlet standards. The financial lunacy surrounding the stock had begun.
After more than two years of lawsuits, S.E.C. investigations, and delays, the merger between DWAC and T.M.T.G. was finally completed, on March 25. The following day, T.M.T.G. began trading as a public company, based solely upon the financial performance of Truth Social, which has been sorry at best.
It didn’t matter. Trump fans worldwide went crazy for the stock, driving it up to above $79 per share—more than double where it closed before the merger was consummated—to a market value of $10.8 billion, or some 2,000 times its revenue. (By contrast, Nvidia, the hottest A.I. company in the world, trades at a mere 37 times revenue.) During the three subsequent trading days ending March 28, the stock began to descend a bit, falling 22 percent, giving the company a market value of $8.4 billion. It fell a further 21 percent on April 1, and it was no joke.
Lots of people started “shorting” DJT, or betting that its price would fall, but that’s been surprisingly difficult, and expensive, because the “float,” or shares trading in the market, is so small—and to “short” a stock you first have to borrow it from someone, and then sell it before hopefully buying it back down the road at a lower price.
According to S3 Partners, a financial-data marketplace, it costs a whopping $8,333 a day in borrowing costs to short 10,000 DJT shares. “So, if you are shorting DJT, you better be right and better be right real fast or the short financing costs will eat up all of your principal [and] profits, or ramp up your losses,” according to Bob Sloan, S3’s founding partner.
Fast Company wrote that DJT “could be the meme-iest meme stock that ever memed.” Scott Galloway, the N.Y.U. professor and co-host, with Kara Swisher, of the Pivot podcast, called DJT “Jenga” and a “house of cards.”
As for Trump, he may actually now be a paper billionaire. Just when he needs money the most, Trump owns 78.75 million shares of DJT—or nearly 57 percent of the company, worth around $3.3 billion. It is possible he will soon receive another 36 million shares, worth an additional amount a little under $2 billion, if the stock continues to trade at these inflated price levels for 20 days out of a future 30-day trading period.
Whether he’ll actually be able to cash out before it heads to zero, like many other SPACs, is an entirely different question. Trump is in a slight bind with DJT because if he makes noises about selling his shares, the stock will most certainly trade down—any value it has is solely derived from his association with the company, and if he sells out, there’s essentially nothing left.
Given that this is Donald Trump we’re talking about, it’s not out of the question that he might sell anyway. But if and when he divests himself—and I suspect it will be sooner rather than later—the shareholders who got burned will likely file lawsuits to try to recover from Trump what they lost as a result of his selling.
On the bright side, even though Trump controls the T.M.T.G. board of directors—which includes his son Donald Jr. and Devin Nunes, the former congressman who left to become C.E.O. of T.M.T.G.—he is prohibited from selling any of his shares for six months. Even then, he will be limited in how much he can get rid of at once. So it’s possible the stock price could plummet before he has a chance to get out.
There are other reasons the stock continues to trade down, too. Incredibly, two days after the T.M.T.G. merger, Trump sued Litinsky and Moss, who came up with the idea for T.M.T.G. in the first place, in Florida state court. He alleges that they “failed spectacularly” at organizing the business, and demands their 8.6 percent stake in the company, worth an estimated $600 million.
And then there is the fact that Truth Social and Trump Media & Technology Group Corp. make no money. In 2022, its first year in business, Truth Social had less than $1.5 million in revenue.
But wait, there’s even more. The day before the merger, BF Borgers, TM.T.G.’s auditor in Lakewood, Colorado, wrote in an audit opinion in a new regulatory filing that the company’s “operating losses raise substantial doubt about its ability to continue as a going concern.” In fact, according to The Guardian, money was so tight at T.M.T.G. that the company had to borrow a total of $8 million in the form of convertible notes—$2 million in December 2021, and $6 million in February 2022—from an entity called ES Family Trust, a shell company controlled by a Russian-American businessman, Anton Postolnikov. (U.S. banks, apparently, were reluctant to lend money to Trump because of his involvement with the January 6 insurrection.) In the end, the merger somewhat obviated the auditor’s concern, because Trump’s company scooped up more than $200 million from the SPAC.
But on April 3, two brothers, Michael and Gerald Shvartsman, pleaded guilty to one count of insider trading in the stock of DWAC. In the days leading up to the merger, a DWAC board member tipped them off about the impending deal, causing DWAC stock to soar. The brothers made more than $22 million in illicit profits from the information—Michael Shvartsman used some of the money to buy a $14 million yacht he named Provocateur—which he may or may not have to forfeit as part of their plea agreement.
The brothers await sentencing of up to 20 years in prison and possible deportation back to their home country of Canada. According to The Guardian, Michael Shvartsman was recently affiliated with Postolnikov’s ES Family Trust. And so it goes.
On a recent episode of Pivot, Galloway said, “I have never seen a company that feels like a better short.” Swisher replied, “The fact that you’re mixing social media, Donald Trump, TikTok, and a meme stock, it’s peak 2024. This guy, as always, has found a way out. He’s got to be the luckiest fuck in America.”
Whatever the outcome of DJT the stock ticker, for D.J.T. the man and presidential candidate, the quest for a new low—and rock bottom—continues.
William D. Cohan is a Writer at Large at AIR MAIL and the author of such best-selling books as The Last Tycoons, House of Cards, and The Price of Silence. He is a founding partner of Puck. His latest book, Power Failure, is out now