Former President Donald Trump’s new media company might just be another fallacy as the Bloomberg analyst Matt Levine wrote that the company is a joke from every aspect.
The Media Company and What Is So Odd About It
The America-based media company named Trump Media and Technology Group (TMTG) was founded by former US President Donald Trump in February 2021. Devin Nunes, the Congressman, has decided to retire from Congress to act as the CEO of the company.
The company was founded when the established social media sites like Facebook and Twitter blocked accounts of Donald Trump. The group is intended to provide competition to these sites in the social media world.
The odd parts about the company are in their investor presentation, about which Matt Levine wrote that every public action the company takes gives him more evidence that it’s nothing but a practical joke.
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The oddest part about the presentation is that the company has already filled its 30 important positions and the representation of the people in these positions is funny, to say the least.
The company uses the first name and the initial of last name only to represent the people, as the chief technology officer for the company is Josh A. and the Vice President of Engineering is Steve E. It gets funnier when a senior mobile developer’s name is “BJ”.
The slide, Slide 21 to be exact, also has a footnote that says that the person may be subjected to change. That makes us believe that these are not real people but only stand-ins.
The Chief Executive Operator of the Company
All other people may just be stand-ins but the CEO of the company, David Nunes is a well-known Republican Congressman. The Congressman would retire from Congress in January to continue his career as the CEO of Trump’s media company.
Nunes does not have any prior business experience nor does his social media history speak excellently. He filed a lawsuit against a Trump parody account on Twitter which he lost and then he urged his followers to shift to Parler, a more conservative version of Twitter.
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However, if the company materializes, Parler would also be a competition to the TMTG. As far as his political career is concerned, Nunes faces a tough re-election struggle as a Republican in a district that is becoming increasingly liberal.
So he preferred joining this organization to possibly losing another election in 2022. Working for Trump, though, comes with apparent risks. Trump is known to stiff his contractors and investors as a real estate developer.
The Financial Aspect
No matter if the company sounds like a joke, it is a serious venture with real money at stake. TMTG intends to merge with Digital World Acquisition Corp., a special-purpose acquisition company (SPAC).
The company has raised approximately $1 billion for the transaction. The DWAC is a public enterprise and sooner or later, it might have to reveal its investors but for now, they remain anonymous.
When word of the Trump merger got out in October, two hedge funds that had invested in DWAC before learning about it withdrew their money from the company. The TMTG-DWAC partnership is already in a lot of jeopardies.
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Early in 2021, Donald Trump met with Patrick Orlando, the CEO of DWAC, before the company had raised money as a SPAC and gone public in a September offering. If they talked about the exact deal that happened, they’d be breaking the regulations for SPACs, which aren’t allowed to solicit money with a specific target company in mind.
The Securities and Exchange Commission is looking into the matter and may impose penalties or sanctions, or it may find no wrongdoing at all.
If the merger goes through, DWAC investors will be able to buy shares at a discount to the market price and immediately sell them, thus guaranteeing a profit. The TMTG investor presentation, however, is vague about how exactly the company will make money.
Even though his present company is under investigation for fraud, Trump considers himself a corporate legend. Six bankruptcies and thousands of litigation may be found in his business history. Only time will tell how successful this media enterprise turns out to be.