A very liberal friend texted me on Friday. You just heard news about the $350 million civil fraud judgment against Donald Trump in New York.
This is in addition to the tens of millions he had to pay to former magazine columnist E. Jean Carroll, whom he was convicted of sexually assaulting and then defaming.
also: Donald Trump must pay additional $83.3 million to E. Jean Carroll in defamation case, jury says
My friend thought Trump was backwards – at least financially -.
She's not alone. It seems that a lot of media outlets hold the same opinion.
They couldn't be more wrong.
Aside from the headlines, Donald Trump has just done something Taser A sum of money, all paid for by advertising his campaign for the White House. (A very cynical person might suggest that this is part of the point.)
how much? Forget those fines that total less than $500 million. Trump was suddenly on track for a windfall of about $4 billion. And he's accomplished most of that in just the five weeks since his huge win in the Iowa caucuses put him in pole position to capture the Republican presidential nomination.
This windfall comes from the highly anticipated IPO of his social media platform, called Truth Social, which he launched — amid massive derision from the mainstream media, I might add — in 2021 after being fired from Twitter in the wake of the events of January 6. 2021.
Truth Social received SEC approval this week to go public.
opinion: Stocks linked to Donald Trump's Truth Social platform are soaring. Read this before you invest.
Read also: DWAC rises more than 15% as it moves to buy Trump Media & Technology Group — but there's a potential snag
It will reach 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 list on the stock market first and then have a set period of time to find a company to acquire or merge with.)
Under the terms of the deal, which has been in the works since 2021, Trump is set to personally acquire 79 million shares in the company when the deal is completed, possibly as soon as this quarter.
Or so the company indicates in a new SEC filing, on page 309.
The value of those shares today: $48. They were down $2 on Friday, but only after a stunning rally that lifted them from just $17 in early January, before the Iowa caucuses.
(Let's add that Devin Nunes, a Trump aide, former Republican congressman from rural California and CEO of Truth Social Holdings, would be more modest. At current prices, his shares are worth $5 million.)
This values Trump's personal stake in the company at $3.8 billion — an increase of $2.5 billion since his victory in Iowa over Ron DeSantis, Nikki Haley and others. Who says that? Costs Money to run for president?
The stock boom is doubly welcome for Trump. Not only does this mean that the value of his shares rises, it means that he gets more shares. Under the terms of the deal, Trump and his partners in Truth Social will receive an additional 40 million shares — current value: $1.9 billion — if the stock stays above $17.50.
What the stock's “worth” really is is anyone's guess. It's a speculative investment, to say the least, even in meme stocks. It can easily sink to the ground. But as long as the price stays above $17.50, Trump is in the pink zone.
There's no mystery about why stocks are booming. Some traders are riding the new Trump train as he marches toward the Republican presidential nomination — and perhaps a return to the White House.
Many are betting that if Trump becomes president again, he will do for Truth Social in his second term what he did for Twitter in his first term.
In case you've forgotten, Trump has effectively used his Twitter account as a semi-official presidential communication tool. You can't follow politics without following him on Twitter. In fact, you can't really follow the news. And his tweets permeated the culture — as when Andy Serkis, the actor who played Gollum in “The Lord of the Rings,” read a number of these tweets on late-night television.
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 has tripled during Trump's four years in office. It was worth $40 billion when he left. (There were many factors involved, but all this free publicity, provided by P. T. Barnum at the White House, didn't do much harm.)
Trump's new gains from Truth Social come at an advantageous time for him. Not only does he face huge fines, but also mounting legal costs. He is currently facing four criminal trials, including 91 felony charges.
Two are accused of trying to overturn the result of the 2020 elections, in which he lost to Democrat Joe Biden by more than 7 million votes and by 306 to 232 in the Electoral College. One of them involved the mishandling of classified documents after leaving the White House. The fourth case, on charges of paying hush money to porn star Stormy Daniels during the 2016 presidential campaign, is scheduled to begin next month.
be seen: The checks that led to Trump's first criminal prosecution in the “hush money” scandal.
As I noted before, Trump would not have faced this prosecution at all if he had paid Stormy Daniels with gold coins instead of checks.
However, accessing his new billions from Truth Social to help pay his legal fees will be a challenge. Presumably, if necessary, Trump could borrow against his shares. Lawyers involved in the deal declined to comment. The phone number listed for Digital World Acquisition Corp has been disconnected. In company files. Emails sent to the media relations address bounced.
Remember, Trump was trailing Florida Governor DeSantis in the presidential race until his first legal indictments arrived.
be seen: Trump's indictment boosts his odds of becoming the Republican Party's presidential nominee in 2024. You can bet on it.
Do you see how this whole thing fits together? The establishment accuses Trump. The publicity gives him an irreplaceable advantage in the Republican presidential race. This gives him a $4 billion windfall. It can transfer some of that money — through fines and legal fees — to the foundation. Cost of doing business.
A truly cynical person might wonder if they're all in on it. The rest of us are being played.
