I’m sure everyone remembers the hysterical, overwrought coverage of the Clinton Foundation, an international charity run by former President Bill Clinton when Hillary Clinton ran for office in 2016. The entire media establishment had a monumental case of the vapors over what they considered to be an egregious conflict of interest because people might give money to the charity in order to influence the presidential candidate Hillary Clinton. It was a major scandal that contributed heavily to the unprecedented, hostile coverage of Clinton.
Trump got critical coverage too but he was treated as more of a clown. Hillary ws treated like a criminal.
It will be very interesting to see how this is handled:
Former President Donald J. Trump said on Wednesday that he had lined up the investment money to create his own publicly traded media company, an attempt to reinsert himself in the public conversation online from which he has largely been absent since Twitter and Facebook banned him after the Jan. 6 insurrection.
If finalized, the deal could give the new Trump company access to nearly $300 million in spending money.
In a statement announcing the new venture, Mr. Trump and his investors said that the new company would be called Trump Media & Technology Group and that they would create a new social network called Truth Social. Its purpose, according to the statement, is “to create a rival to the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley.”
Since he left office and became the only American president to be impeached twice, Mr. Trump has had an active presence in conservative media. But he lacks the ability he once had to sway news cycles and dominate the national political debate. He filed a lawsuit this month asking Twitter to reinstate his account.
The announcement on Wednesday also pointed to a promised new app listed for pre-sale on the App Store, with mock-up illustrations bearing more than a passing resemblance to Twitter.
The details of Mr. Trump’s latest partnership were vague. The statement he issued was reminiscent of the kind of claims he made about his business dealings in New York as a real estate developer. It was replete with high-dollar amounts and superlatives that could not be verified.
Rumors of Mr. Trump’s interest in starting his own media businesses have circulated since he was defeated in the November 2020 election. None materialized. Despite early reports that he was interested in starting his own cable channel to rival Fox News, that was never an idea that got very far given the immense costs and time needed to put into it. A close adviser, Jason Miller, started a rival social media platform for Trump supporters called Gettr. But Mr. Trump never signed on.
In a statement on Wednesday night, Mr. Miller said of his and Mr. Trump’s negotiations, “We just couldn’t come to terms on a deal.”
Mr. Trump’s partner is Digital World Acquisition, a special purpose acquisition company, or SPAC. These so-called blank-check companies are an increasingly popular type of investment vehicle that sells shares to the public with the intention of using the proceeds to buy private businesses.
Digital World was incorporated in Miami a month after Mr. Trump lost the 2020 election.
The company filed for an initial public stock offering this spring, and it sold shares to the public on the Nasdaq stock exchange last month. The I.P.O. raised about $283 million, and Digital World drummed up another $11 million by selling shares to investors through a so-called private placement.
Digital World is backed by some marquee Wall Street names and others with high-powered connections. In regulatory filings after the I.P.O., major hedge funds including D.E. Shaw, Highbridge Capital Management, Lighthouse Partners and Saba Capital Management have reported owning substantial percentages of Digital World.
Digital World’s chief executive is Patrick F. Orlando, a former employee of investment banks including the German Deutsche Bank, where he specialized in the trading of financial instruments known as derivatives. He created his own investment bank, Benessere Capital, in 2012, according to a recent regulatory filing.
Digital World’s chief financial officer, Luis Orleans-Braganza, is a member of Brazil’s National Congress.
Mr. Orlando disclosed in a recent filing that he owned nearly 18 percent of the company’s outstanding stock. Mr. Orlando and representatives for Digital World did not immediately respond to requests for comment.
This is not Mr. Orlando’s first blank-check company. He has created at least two others, including one, Yunhong International, that is incorporated in the offshore tax haven of the Cayman Islands.
At the time that investors bought shares in Digital World, it had not disclosed what, if any, companies it planned to acquire. On its website, Digital World said that its goal was “to focus on combining with a leading tech company.”
At least one of the investors, Saba Capital Management, did not know at the time of the initial public offering that Digital World would be doing a transaction with Mr. Trump, according to a person familiar with the matter.
Mr. Trump, who has repeatedly lied about the results of the 2020 election while accusing the mainstream news media of publishing “fake” stories to discredit him, leaned hard into the notion of truth as his new company’s governing ethos.
“We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American president has been silenced,” Mr. Trump said in his written statement, vowing to publish his first item soon. “This is unacceptable.”
Unless he gets a bad diagnosis or has shuffled off hi mortal coil, Trump is running for re-election in 2024. And will have his own propaganda machine, run by him without even the semi-useless mediation of the current right wing media.
ON the other hand, this just looks like another grift so it may have no impact at all other than to put a bunch of badly needed cash in the Trump family coffers:
The truth behind TRUTH Social is right there in the first paragraph of the announcement, which is not focused on the technology behind the platform, or anything that Trump is bringing to the table. Instead, that paragraph is dedicated to explaining how the project has been given “an initial enterprise value of $875 million” and “a cumulative valuation up to $1.7 billion.” Which is amazing, because what it seems to have is nothing more than a credit line and some highly generic code that was hacked within minutes of the beta address becoming known.
No sooner had the first test invites been handed out than someone spoofed Trump’s account and posted, well, as Daily Beast contributor Steven Monacelli accurately puts it, “a photo of a pig defecating on its own scrotum.” Two hours after it first went up, the whole site came down.
However, it doesn’t matter if the site ever sticks its head above the waste pool again. Because that’s not the point. Donald Trump is potentially walking about with $340 million, even if it fails completely. That’s the point.
What Trump is attempting here is something called a SPAC, or Special Purpose Acquisition Companies. It’s also known as a “reverse merger” or a “blank check company.” It’s a scheme in which some low-value shell company that’s already listed on a stock market “buys” a private company, then relists itself under the name of that new company. In almost all cases, what’s really going on is that the private company is just taking over the empty husk of that shell company—a company that may have existed for no other purpose than to serve as a placeholder for some future SPAC.
Why go through these steps? Because getting listed on a stock exchange generally requires clearing a number of hurdles, including meeting requirements from the Securities and Exchange Commission. SPACS can just pop into existence, taking a fast track to a stock listing while dodging almost every qualifying step.
The whole idea of the SPAC is relatively new, and in the last year they’ve really taken off. In some cases, these schemes have allowed start ups to jump immediately to market, capitalizing on interest in new technology or rising industries. Among others, several small electric car companies made a sudden appearance on NASDAQ last year after taking over the corpses of fading corporations.
But there’s one particular kind of SPAC that’s described in this article from Mergers and Acquisitions. A kind known as the “celebrity SPAC.”
First, a “celebrity” or another notable person (the “Sponsor”) raises capital by taking an empty holding company (the SPAC) public in an IPO. This SPAC then uses the cash proceeds from the IPO and a large stock issuance to acquire a private company, making it public.
That’s exactly what’s happening with TMTG. Teenage Mutant Turtle Gropers—sorry, that’s Trump Media and Technology Group—doesn’t have to rival Twitter. It doesn’t even have to threaten whatever “conservative social media platforms” are still limping along out there. It just has to collect investors. Because this:
Unlike IPOs, however, the Sponsor gets a 20% stake, called a “Promote,” and there’s much less regulatory scrutiny. Oh, and this “Sponsor” invests almost nothing in exchange for this 20% stake.
Remember the numbers on how this was being “valued” in Trump’s announcement? That’s right. This is an attempt by Trump to scam between $175 million and $340 million with essentially no investment and no effort. As the article explains, the “sponsor” can walk away with a bundle, “even if the SPAC performs horribly and the share price plummets, while normal investors will lose everything.”
Trump already has a good idea how this works, because, as CNBC noted in 2020, former Trump adviser Gary Cohn put together a SPAC worth a potential $600 million (and $120 million directly to Cohn) when it formed a “blank check” holding company whose entire purpose seems to be simply to get people to buy into shares. A SPAC of this variety is nothing more than a exchange-based Ponzi scheme in which the original Ponzi is guaranteed to walk away with a mountain of cash.
TMTG isn’t a social media platform. It’s a scam. Trump does need another social media platform. He needs suckers willing to buy stock. And Trump has always been very, very good at locating suckers.
Sweeet….