Dem
51
GOP
49
Jonathan V. Last at The Bulwark has an interesting column about Donald Trump's publicly listed company, which trades under the ticker symbol DJT (closed yesterday at $40.93).
Trump told his supporters that if they bought stock in the company, they could support him and get rich at the same time. Some of them did it and they are not happy with the results. A reporter at Bloomberg News, Jason Leopold, filed a bunch of FOIA requests and made some discoveries. In the most recent quarter, DJT had gross revenues of $800,000 and net losses of $327 million. The market capitalization is $8 billion, a bit high for a company that is losing $326 million per quarter, with little hopes of turning that around. By way of comparison, DJT is now worth as much as The New York Times or Sunoco, and more than American Airlines or Alcoa. What's wrong with this picture?
Last points out that DJT is not a business in the ordinary sense. Some say it is more of an NFT, a token that people buy to demonstrate their fealty to Trump. Or maybe it is a memestock, like a roulette wheel people use for entertainment purposes. Last says that the stock is an exotic financial instrument to facilitate a transfer of wealth—from the stockholders to Donald Trump.
How do the stockholders feel about this? Well, Leopold's FOIA request turned up some angry letters to the SEC. The writers weren't complaining that DJT was a scam. No, they were complaining that dark and shadowy forces were preventing the stock from going even higher. In reality, most of the shares are owned by Trump and his cronies and only a tiny fraction are available to be traded. The fact that it hasn't collapsed completely given the last quarterly report may be due to some friends of Trump, domestic or foreign, being willing to buy any shares offered for sale at about $40 to keep the price stabilized. Given the thin trading, it wouldn't take much to keep the stock from collapsing. Here is a piece of one of the letters:
My name is [REDACTED] and as an individual investor I own [REDACTED] shares of "DJT" I have been witnessing an ongoing daily manipulation, price suppression and illegal naked shorting, and these crooks never having to account and cover their short positions every single day. Since DJT has been a hard to borrow security with very few shares available to short these crooks have an endless stream of fake synthetic shares every day in large amounts, the question is how are they getting these shares and never having to account for them? Numerous brokerages and dealers are loaning these fake shares out to collect high interest rates for profit. Fake synthetic shares do not exist in reality so therefore they should not be used for shorting a stock. Something needs to be done to stop this theft of good investors who are investing in a fair and just market. Thus whole system is crooked and rigged for their benefit.
It is not clear what the writer is ranting about. Shorting is generally naked (i.e., you don't own the stock you expect to drop). Synthetic shares typically refer to stock options companies grant executives to incentivize them to work to make the stock go up. That doesn't seem relevant here. There are warrants for DJT, but Trump owns most of them and if he is shorting them, it would be a PR disaster if it came out that he was betting on his own stock, it would drop.
Another writer noticed that for a short time during the transition from DWAC to DJT, Charles Schwab inadvertently had the stock listed on its Website for $15,994. He thought he was rich and gave a sell order. He got $68/share. He complained to the SEC that Schwab owes him $5 million. Any sane person who had been following the stock would have known that the trading range had been between $57.25 to an all-time high of $79.38 and $15,994 was an obvious glitch of some kind. If the price really had been $15,994, the market cap would have been $3 trillion. Only six countries have a GDP above $3 trillion. The writer stated that if he didn't get his $5 million, he would sue. Good luck with that; we have a sneaking suspicion that Charles Schwab might just have a lawyer or two on staff.
DJT's Price/Earnings ratio is above 10,000. For comparison, Microsoft's is 36, Apple's is 32, and Meta's (Facebook) is 28. Surely an astute investor might have thought: "Hmm, something is fishy here." But as P.T. Barnum noted, there are 525,600 suckers born every year, or 10.5 million in the past 20 years. (V)