Wall Street Don Deals More Liar’s Poker

Photo by NIPYATA!

When last we checked in on Trump’s new media company, which has the full name of Trump Media & Technology Group (TMTG) and trades on Nasdaq under the monogrammatic ticket symbol DJT, the shares had gone public at around $60 a share, spiked close to $80 (giving the company a $10 billion valuation), and then—to use a Wall Street cliché—“consolidated” closer to $40 a share.

Now, as Trump is mounting a “napping defense” in his New York City criminal trial, shares in Trump Media have fallen to $36 $29 $25 $22 a share, wiping out billions of dollars in DJT market capitalization.

In response, Trump Media decided to double down on its patriot games and this week declared its intention to register (in anticipation of selling) some 204 million in restricted shares, so that he’s in a position to get out of the company prior to its inevitable crash. (Going forward, Trump will own about 114,750,000 of the shares outstanding—about 60% of the voting stock.)

Normally, when stock jobbers of the Trump variety use public markets to fleece billions from gullible investors, the Securities and Exchange Commission (SEC) steps in to de-list a fraudulent company or otherwise suspends trading in the bogus stock.

In this instance, just as the company’s stock was collapsing in the market, the SEC circulated its “red herring” (a preliminary prospectus on a securities’ registration) which gives the impression that Trump Media and Technology Group is a normal public company—with income, assets, and responsible directors—while anyone who spends time reading all 217 pages of the April 15, 2024, Form S-1 Registration Statement (under the Securities Act of 1933) will come to the conclusion that TMTG is nothing more than another Atlantic City castle in the air.

In these filings, the company discloses “everything” to the market, so that later, when the company collapses, the directors (if not the SEC) can say to the fleeced public: “Well, we warned you.”


A few numbers are in order to understand just what Trump and his pump house gang are trying to slip past (somnolent) financial regulators and dump on a market still in thrall to the Trump brand (so that he can walk away from the market wreckage with a few billion dollars—“a little something, you know, for the effort”).

In late March 2024, Trump’s Truth Social—an ersatz Facebook or Twitter—merged with Digital World Acquisition Corporation (DWAC), which had some $300 million in cash on its balance sheet and a Nasdaq listing.

In the most recent filing, under the category of “Description of Business,” the company states, in its entirety: “Truth Social is a free expression application that offers social networking services.”

In the so-called reverse merger that took place, Trump’s Truth Social took over DWAC and its cash, and Trump emerged from the combination with 58% of the shares in the new public company, which in the euphoria of its post-listing trading had a $5-10 billion valuation.

The problem for Trump and his stock-in-the-wall gang is that his shares in the company are “restricted” and subject to a six-month “lock-up” (prohibiting him from selling before next September unless his loyalist board, which includes Don Jr., changes the rules).

Thus the reason for the new filing is to register the company’s current outstanding shares (about 137 million, in various forms), so that when the time comes, Trump and other shareholders can unload their positions. (As Henry Gondorff, played by Paul Newman, says in The Sting: “Don’t worry about it, pal. They wouldn’t have let you in here if you weren’t a chump!”)

While the company was in front of the SEC with this request, it decided to stir into the brew another 67 million shares, most of which it has decided to give to Trump himself as “Earnout Shares,” a bonus based on the success of the company’s publicly-traded price (even though Trump himself put up no money to start the media company and has so far only contributed his social media account to the enterprise).


This prospectus is more than simply a financial disclosure statement, as contained in the small print on nearly all 217 pages are traces and clues about how Donald Trump thinks (in an election year) about what might be called “the public good”—which in this case is something to be deceived, cheated, bilked, and abused until its money is finally his.

Let’s start with the fiction that Trump Media is an operating company worthy of a $3.12 billion dollar valuation (as I type) on Nasdaq. Last year, TMTG earned only $4.1 million in revenue while posting a $58 million loss.

To put that revenue figure into prospective—given than the prospectus and other marketing brochures talk about Truth Social “taking on” Facebook and the “liberal media”—TMTG’s revenue is a far cry (.003%) from Meta’s $134 billion in 2023 revenue.

Nor does a deep dive into Form S-1 indicate that Truth Social has much interest in growing its social media business.

To date (I am not making this up), TMTG has invested only $121,000 in computers and $34,500 in office furniture, which is the extent of its investment in PP&E (property, plant, and equipment). By comparison, to date Google has spent $201 billion on PP&E.

Finally, at year-end, according to the filing, Truth Social “had approximately 36 full-time employees.” At the same date, Meta platforms had 67,317 full-time workers.

Trump Media is a Potemkin corporation, a stage set in front of which Trump and his cronies can issue and trade common stock, convertible notes, warrants, and preferred shares, with the sole purpose of extracting billions from a gullible market.

In the 217-page SEC filing, only a few paragraphs are devoted to the actual underlying business; all the rest of it is endless detail about shares, buyouts, legal fees, conversion ratios, dividends, coupon rates, options, and the like, in which the only business of TMTG is that of enriching Donald Trump.


Anyone buying DJT today is acquiring about $100 million in accumulated loses, $200 million in the cash remaining from the Digital World fundraising, $4 million a year in revenue, and, finally, the belief that Donald Trump is worth billions to anyone hosting his social media account.

When Trump was thrown off Twitter in 2021, he had some 87 million followers, while today on Truth Social he has only two million subscribers, and that figure might well be inflated (as little in all 217 pages of the prospectus outlines the company’s users or subscribers).

In theory, Trump’s windbagging ought to be worth something to investors in TMTG, except that there are signs between the lines in the prospectus that even Trump himself has lost interest in the MAGA bullhorn enterprise.


For starters, Trump has sued just about everyone connected with the start-up company, including two guests from The Apprentice who first brought him the idea and the original CEO of Digital World who put together $300 million to invest in Truth Social. The litigation sections of the prospectus go on for pages.

(With several of the investors, Trump—acting like a medieval pope—declared their “services agreement” void ab initio, a papal bull now being adjudicated in a Delaware court.)

Then there is this paragraph in the filing that indicates the extent to which Trump Media lives entirely at the forbearance of King Donald:

TMTG Sub [Truth Social] may not terminate the License Agreement based on the personal or political conduct of President Donald J. Trump, even if such conduct could negatively reflect on TMTG Subs reputation or brand or be considered offensive, dishonest, illegal, immoral, or unethical, or otherwise harmful to TMTG Subs brand or reputation. Further, TMTG and TMTG Sub may be obligated to indemnify President Donald J. Trump for any losses of any type that relate in any way to the License Agreement, including any such losses attributable to President Donald J. Trumps own offensive, dishonest, illegal, immoral, unethical, or otherwise harmful conduct.

It must finally be the immunity he has always dreamed about.


In other words, no matter what actions Trump takes that harm the company, TMTG is unable to utter a word of reproach, let alone force him out of the company. (Plus it would have to compensate him for any damages that he himself has caused.) But the terms of the so-called License Agreement are even worse than they appear.

According to the fine print in the prospectus, Trump is not even required to post everything on Truth Social, and when he does, the company only has an exclusive on his material for “6-hours,” after which he can distribute it on Facebook, X, YouTube or wherever.

Here’s the paragraph that describes this one-sided relationship:

Until February 2, 2025, President Donald J. Trump has agreed to channel non-political communications and posts coming from his personal profile to the Truth Social platform before posting that same social media communication and/or post to any other social media platform that is not Truth Social until the expiration of the “DJT/TMTG Social Media 6-Hour Exclusive” which means the period commencing when President Donald J. Trump posts any social media communication onto the Truth Social platform and ending six hours thereafter; provided that he may post social media communications from his personal profile that he deems, in his sole discretion, to be politically-related on any social media site at any time, regardless of whether that post originates from a personal account. As a candidate for president, most or all of President Donald J. Trumps social media posts may be deemed by him to be politically related. Consequently, TMTG may lack any meaningful remedy if President Donald J. Trump minimizes his use of Truth Social. Additionally, none of the limitations or exclusivity contained in the License Agreement will apply to any business ventures of President Donald J. Trump or The Trump Organization or their respective affiliates.

Explain to me why Truth Social is now rushing in the front door at the SEC to register another 67 million shares in the company, just so that it can gift 36 million of those shares to Donald Trump—in exchange for nothing.

The answer: Trump Media is Trump’s secret sharer, acting only on his behalf. He is its largest shareholder, he controls the management and the board of directors, and he’s the only client of consequence of the operating company. In short, La société, c’est moi, which explains yet another transaction buried on page 216 of the prospectus.

To pay for the registration of Donald Trump’s current and future shares in TMTG, the public company is paying $720,723.73 in registration fees.

On what basis should a public company pay the registration fees of one of its shareholders, even its largest? In this case, Trump isn’t even an employee of the company, so the payment (on his behalf) cannot be taxed as a fringe benefit.

Not that taxes ever really descend to the Trump level. In 2023, Trump Media paid no federal income taxes (remember, it lost millions), and in state taxes it paid $1,100 (that’s one thousand one hundred dollars), which at least is a 46% increase over his usual tax bracket of $750.


What is also clear in Form S-1 is the extent to which Trump is in a race with Mammon—meaning, will he be able to register his 114 million shares and get around the lock-up provisions in the next six months so that he can dump the stock before the company is worthless or de-listed from Nasdaq.

Clearly, it doesn’t help investor confidence that Trump is now spending his days in a dingy lower Manhattan criminal court smirking, muttering to jurors, dozing, and whinging at TV cameras. But the real reason for DJT’s price collapse is that the company is an empty vessel and not all investors are chumps.

Even if Trump receives SEC approval to register his shares, there’s no guarantee that anyone would buy a serious block of the company’s stock for a price north of $1.05 a share, which is my calculation of the company’s market value (the cash on the balance sheet divided by the number of shares outstanding, after this latest watering of the stock).

Nor will it help Trump’s cause (that of artificially inflating the share price) that the meme investors (those Reddit day traders buying and selling fifty shares from their grandmother’s basement) have abandoned DJT to the short sellers, who every day are gleeful when the stock loses another 10-20% off its previous closing price.

Finally, it seems lost on company CEO Devin Nunes (Trump sycophant, ex-member of Congress, and enabler in these shell games) that in pushing now to register all 204 million shares of the company’s common stock and warrants, he’s playing into the game of the short sellers, who will finally have shares in the market to borrow and drive TMTG into the ground.


When Trump Media goes the way of Trump Steaks, Trump University, and the Trump Shuttle, I am sure Trump will blame the Biden administration for ruining “my beautiful company that was worth billions.” But for the moment Biden’s SEC is acting more like a market maker than a regulator of Trump Media.

The SEC seems indifferent to the fact that by leveraging his political influence, Trump has managed to flog a company—with only $4 million in revenue, millions in losses, 36 employees and $121,000 in computers—into a listed company that was briefly valued at $10 billion and described in its promotional literature as positioned to take on Meta and X.

Nor does the SEC seem to mind that until March 25, 2024 (according to the prospectus) Donald Trump was both the chairman of the board (thus the architect of these many deceptions) and the majority shareholder (about 58%) whose major contribution to the money-losing company has been to demand an additional 36 million in “Earnout Shares”.

What perhaps might spur the SEC into action in this financial train wreck are the present and future shareholder and derivative lawsuits that will unpack the many insider and sweetheart stock deals that rewarded Trump and his management team with millions of shares that they never paid for and whose collapse will cost investors billions.

At the very least the company’s demise will be the full-employment act for a generation of class action securities lawyers, all of whom will have Trump’s insider post of April 4, 2024 pinned over their desks. It reads:

I THINK TRUTH IS AMAZING! First of all, it is very solid, having over $200,000,000 in CASH and ZERO DEBT. More importantly, it is the primary way I get the word out and, for better or worse, people want to hear what I have to say, perhaps, according to experts, more than anyone else in the World.


And while the SEC is looking through the wreckage, maybe it can explain how former Florida attorney general Pam Bondi ended up with 137,500 TMTG shares and warrants (via Digital World’s Class B Founder Shares).

According to securities law, Digital World raised its $300 million stake before it identified Truth Social as a potential merger partner, but the presence of Bondi—a Trump loyalist and insider—in the Digital World capital structure with Founder Shares could suggest that the plan (to take over Trump’s Truth Social) was in ahead of the funding.

Was it just a coincidence that she invested in the one SPAC (special purpose acquisition corporation) that would later merge with Trumps company?

As background, in 2013 Bondi accepted a $25,000 illegal campaign contribution from the Donald J. Trump Foundation (charities cannot donate to political campaigns; Trump himself signed the check) about the same time that she declined to investigate further into the Trump University scam.

After leaving state office in 2019, Bondi has served Trump in many cheerleading capacities, including in his impeachment defense and efforts to steal the 2020 election. Now she’s registering her 137,500 Trump Media shares and warrants (alas no longer worth $10.8 million) to join the rats leaving the ship.


What I do like about the SEC is that the April 15, 2024, prospectus has two passages that accurately take the measure of the entitled confidence man. The first describes his running of a public company in the 1990 and early 2000s, which reads:

On January 16, 2002, the SEC issued a cease and desist order against Trump Hotels & Casino Resorts, Inc. (“THCR”) for violations of the anti-fraud provisions of the Exchange Act. As discussed in more detail in the SEC Release No. 45287, on October 25, 1999, THCR had issued a press release announcing its results for the third quarter of 1999 (the “Earnings Release”). To announce those results, the Earnings Release used a net income figure that differed from net income calculated in conformity with U.S. GAAP. Using that non-GAAP figure, the Earnings Release touted THCRs purportedly positive operating results for the quarter and stated that the Company had beaten analystsearnings expectations. The Earnings Release was materially misleading because it created the false and misleading impression that THCR had exceeded earnings expectations primarily through operational improvements, when in fact it had not.

Then there is this passage, under the heading, “A number of companies that had license agreements with President Donald J. Trump have failed. There can be no assurances that TMTG will not also fail.” It states:

Trump Shuttle, Inc., launched by President Donald J. Trump in 1989, defaulted on its loans in 1990 and ceased to exist by 1992. Trump University, founded by President Donald J. Trump in 2005, ceased operations in 2011 amid lawsuits and investigations regarding that companys business practices. Trump Vodka, a brand of vodka produced by Drinks Americas under license from The Trump Organization, was introduced in 2005 and discontinued in 2011. Trump Mortgage, LLC, a financial services company founded by President Donald J. Trump in 2006, ceased operations in 2007. GoTrump.com, a travel site founded by President Donald J. Trump in 2006, ceased operations in 2007. Trump Steaks, a brand of steak and other meats founded by President Donald J. Trump in 2007, discontinued sales two months after its launch. While all these businesses were in different industries than TMTG, there can be no guarantee that TMTGs performance will exceed the performance of these entities.

Too bad the SEC isn’t reading its own press releases.

Matthew Stevenson is the author of many books, including Reading the Rails, Appalachia Spring, andThe Revolution as a Dinner Party, about China throughout its turbulent twentieth century. His most recent books are Biking with Bismarck and Our Man in Iran. Out now: Donald Trump’s Circus Maximus and Joe Biden’s Excellent Adventure, about the 2016 and 2020 elections.