Campaign 2024 series: the stakes, not the odds
In 2021, the Boston Globe editorial board asked: “Who owns the president?”
It’s a shame that the business press and political press aren’t exploring that question in light of Friday’s Truth Social multi-billion dollar merger.
Instead, the headlines read like something straight from PR Newswire:
- “Trump poised for billions” (BBC)
- “Trump could score $3.5 billion…” (CBS)
- “Trump is about to get $3 billion…” (CNN)
- “Trump stands to make $3.5 billion…” (Fortune)
- “Trump is on the verge of a windfall of billions” (NPR) and
- “Trump Is In Line for a $3.5 Million Windfall...” plus “Trump Makes a New Fortune… (WSJ).
Notably (or suspiciously), on Friday a special purpose acquisition (SPAC) company, Digital World Acquisition Corp. (DWAC), agreed to merge with Trump’s social media network, Truth Social.
“An IPO is basically a company looking for money, while a SPAC is money looking for a company,” according to Don Butler, Managing Director at Thomvest Ventures.
The merger takes Trump Media & Technology Group (TMTG) public. Trump holds more than 50 percent of the post-merger venture; on paper, that’s an estimated $3.5 billion. The merged venture will trade under the symbol “DJT.”
Why should voters be concerned?
The merger created a new company. Trump is not supposed to sell any of its stock for six months. Called a lock-out, this is a common prohibition setup to protect new stockholders (encourage them to buy) by preventing insider stockholders from dumping their stock.
The new board of directors reportedly includes Donald Trump Jr. and others in the Trump orbit. This new board can change the terms of the lock-out agreement to benefit Trump.
Should Trump return to the White House, voters must consider how “a monetized president” (Jay Kuo) could be manipulated by holders of stock. “Do this, we’ll buy stock and drive up its value. Do that, we’ll sell stock and drive down its value.”
Will there be any restrictions on who can own stock in DJT? Such limitations would be difficult to enforce, particularly if there are intermediaries or big funds involved. This means the Russians, Chinese and Saudis could each take huge institutional stakes in DJT as a publicly-traded company very much tied to the possible future president.
This would make the notion of foreign governments renting rooms at Trump hotels look quaint by comparison. Imagine come 2025 that big, wealthy buyers hold commanding stakes in Trump’s net worth, and he is now the president. What wouldn’t he do to stay in their good graces? Our jurisprudence around the Emoluments Clause isn’t set up to handle such a situation.
It’s not just foreign stockholders voters need to be concerned about. Domestic billionaires can hold stock, too, and probably will so long as it gets them access and leverage.
For example, billionaire Wall Street financier and “Republican megadonor” Jeff Yass was DWAC’s biggest institutional shareholder, with a 2% stake via Susquehanna International Group, his trading firm. He is also a major investor in TikTok’s parent company.
“Trump’s about face on banning the app may have resulted from pressure from Yass,” Kuo wrote.
That’s the national security issue: a publicly-traded candidate.
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At TMV, I also explore Trump’s New York trouble$.
“Not the odds, but the stakes.” That’s how Jay Rosen, NYU journalism professor and media critic, thinks news organizations should be covering the 2024 presidential election.
“The stakes, of course, mean the stakes for American democracy,” Rosen told Oliver Darcy, CNN, last year. “The stakes are what might happen as a result of the election.” Rosen continued: “The horse race [odds] should not be the model… It should not be the organizing principle of your campaign coverage.”
This is my fifth report focused on the stakes facing voters in this presidential election.
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