People are laughing at Trump’s new company

Former US president Donald Trump gestures as he speaks, flanked by Texas Governor Greg Abbott, during a visit to the border wall near Pharr, Texas on June 30, 2021. - Former President Donald Trump visited the area with Texas Gov. Greg Abbott to address the surge of unauthorized border crossings that they blame on the Biden administration's change in policies. (Photo by Sergio FLORES / AFP) (Photo by SERGIO FLORES/AFP via Getty Images)

Previous United States president Donald Trump gestures as he speaks, flanked by Texas Guv Greg Abbott, throughout a see to the border wall near Pharr, Texas on June 30, 2021. (Picture by SERGIO FLORES/AFP by means of Getty Images)

Is this the vengeance of 4 Seasons Landscaping?

That was the worn-down place in Philadelphia where Donald Trump’s attorney, Rudy Giuliani, introduced the doomed effort to obstruct Joe Biden’s win in the 2020 governmental election. The Giuliani group indicated to reserve the 4 Seasons hotel, however someone goofed and Giuliani wound up spouting his familiar election depends on front of a commercial garage door plastered with Trump indications. The Trump effort to reverse the election never ever got anymore expert than that.

Trump’s brand-new media business, called the Trump Media & Innovation Group, might suffer the exact same unskilled misconceptions. An “investor presentation” the business just recently submitted with the Securities and Exchange commission is provoking guffaws amongst company experts, with absurd evasions and hardly any company method. “It does feel like every public action by this company is designed give the impression that it is a joke,” Bloomberg expert Matt Levine composed on Dec. 7.

The oddest part of the TMTG discussion is the “technology team” noted on Slide 21. The business has actually obviously filled 30 crucial tasks currently, however it just notes these staff member with a given name and last preliminary. The primary innovation officer is “Josh A.” “Steve E.” is VP of engineering. Among the senior mobile designers is “BJ.” Are these genuine individuals or stand-ins? We might never ever understand: As a footnote discusses: “personnel subject to change.”

Source: Securities and Exchange Commission

An all-star cast of anonynous heavyweights. Source: Securities and Exchange Commission

One crucial worker is extremely well understood: Devin Nunes, the pro-Trump California Congressman who’s stopping his job in January to end up being CEO of TMTG, with Trump as chairman. Nunes has no company experience, other than for fishy ties to a household farm. His social-media history is spotty. Nunes’ fealty to Trump generated a parody account on Twitter called @DevinCow, triggering a claim by Nunes, looking for to shut it down. He lost in 2015, and began prompting his fans to sign up with Parler, a conservative variation of Twitter. However Parler would complete with Trump’s platform, if it ever emerges.

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As a Republican politician, Nunes deals with a hard re-election fight in a district that’s growing more liberal. So signing up with Trump’s business now might have been much better than losing in 2022. But working for Trump has obvious risks, as the New Yorker pointed out in a piece of satire speculating that Trump will stiff Nunes as he has done with many contractors and investors in his years as a real-estate developer. Maybe it’s not satire. 

The Trump business is a serious venture with real money at stake. TMTG has plans to merge with a special-purpose acquisition company, or SPAC, called Digital World Acquisition Corp., which has raised roughly $1 billion for the deal. Normally, a public company would disclose who its investors are, which DWAC will have to do at some point. For now, however, those investors are anonymous. Two hedge funds that invested in DWAC before knowing of the Trump merger pulled their money in October after news of the deal broke.

Source: Securities and Exchange Commission

* Founded in 2020. Source: Securities and Exchange Commission

The TMTG-DWAC tie-up is already in a bit of trouble. Donald Trump met with Patrick Orlando, DWAC’s chief executive, early in 2021, before DWAC had raised money as a SPAC and gone public in a September offering. If they discussed the very deal that happened, that would violate the rules for SPACs, which aren’t supposed to have a specific target company in mind when they raise funds. The Securities and Exchange Commission is investigating and could issue fines or sanctions, or find no wrongdoing at all.

Assuming the merger goes through, it will allow DWAC investors to buy shares at a discount to the market price, then sell them right away, essentially guaranteeing a profit. But that isn’t necessarily good for the stock, or the company. Investors who want to cash out right away—and have negotiated the right to do so—have no stake in the prospects of the business itself. The investors might even think the real opportunity is cashing in on the initial hype, rather than longer-term profitability.

The TMTG investor presentation is vague about how exactly the company will make money. It points out that Trump’s following on Twitter before the platform banned him in 2020—89 million followers—is more than one-third of Netflix’s entire subscriber base, as if TMTG could rival Netflix out of the gate. But that’s apples and oranges. One account on Twitter—free to the account holder and followers alike—is nothing like a Netflix account in which users pay a monthly fee to access a deep library of content.

Source: Securities and Exchange Commission

More questions than answers. Source: Securities and Exchange Commission

Other oddities abound. A forecast for the number of monetizable users—81 million by 2026—is based on a Morning Consult poll rather any internal analysis. Other forecasts, for subscriptions and revenue, are represented by question markets rather than the actual numbers (even if inflated) found in most business proposals. The “key advisor” whose logo appears on every page is EF Hutton. But this isn’t the storied brokerage firm. It’s a reboot of a brokerage named Kingswood Capital Markets that dates all they way to 2020 and recently bought rights to the EF Hutton name. Apparently the gambit worked.

Trump fancies himself a business icon, even though his current company is under investigation for fraud. His business history includes 6 bankruptcies and several thousand lawsuits. Trump’s real success came as a reality-show entertainer flacking a gilded lifestyle, not as a builder or dealmaker. His latest company might discover a way to convert Trump’s jocular mendacity into steady profits, but it may likewise end up being bit more than a Trump fan club that entertains outsiders who periodically peek inside the fence.

Rick Newman is the author of 4 books, consisting of “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips.

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Jobber Wiki author Frank Long contributed to this report.