Is DJT A Ponzi Scheme?
When Roland was just a kid, I decided to teach him about the stock market. “Never be like Harry,” I told him. “Harry’s your typical stock market sucker, the key to pros getting rich. Harry buys when stocks are high and then sells when they go down, locking in his losses.” Yesterday, in passing, Roland mentioned to me that he was still holding shares he bought in Coinbase, a crypto exchange, when it had fallen from a high of $343/share in late 2021 down to $194 in 2022. That was a bad purchase because it kept on falling— all the way down to $33/share in 2023. But Roland held on and it’s been trading around the $250 range this past month. Harry would have sold at $33 and bought back in again at $250. Many of the MAGAts who bought Trump’s media company stock (DJT) are just like Harry. And they’re losing their asses. [Note about Harry: he inherited a fortune, retired a multimillionaire and has become a sophisticated player in the market— and nothing like the younger Harry.]
The stock market was bad today (down a bit over half a percent), most likely a reaction to Iran shooting missiles at Israel over the weekend and the fear of a wider war and higher oil prices, but Trump Media stock fared far, far worse (down around 18%). The last I looked, the DJT selloff had the price at around $26.60, 65% below its $79 peak on March 26. Maybe it crashed so badly because people saw Señor Trumpanzee nodding off in the courtroom today after all those drugs he had to snort to amp himself up for that deranged Gettysburg address he gave in Schnecksville over the weekend. Today he appeared to be fighting uphill in his dreams.
Meanwhile, on Sunday, Drew Harwell took a look at the bath the unsophisticated MAGAts are taking as purchasers of their sleepy idol’s stock. We’ll come back to Harwell in a moment. I just want to say something about the MAGAt losers who are losing, in some cases, their life's savings.
Their first mistake, of course, is that they imagine they’re buying into Trump himself, not thinking about his consistent failures to deliver for investors before and his unbroken series of bankruptcies (6) and business failures. They shouldn’t be thinking that they adore Trump for his racism and xenophobia and his anti-Woke agenda; they should be thinking about his Trump-first agenda, his unbridled corruption and all those failed business ventures, from Trump Airlines, Trump Steaks, the New Jersey Generals, Trump Magazine, Trump Mortgage, Trump Vodka and Trump University to Trump Taj Mahal, Trump Plaza Hotel and Casino, Trump Castle Hotel and Casino, Trump Hotels and Casino Resorts and Trump Entertainment Resorts. Almost everyone who invested in any of that junk lost their shirts… except, of course, Trump himself.
Then there were Trump’s cologne brands, Success by Trump and Empire by Trump, which were sold exclusively by Macy’s until both the retailer and the cologne maker dropped the mogul. (Unfortunately for Trump, he didn’t have that excuse in 2007, when Donald Trump: The Fragrance— his first foray into the market— was discontinued.)
Likewise, Macy’s discontinued Trump’s line of menswear, which it had carried for 11 years. According to his financial disclosure, it brought in between $1 million and $5 million— not the kind of money a man who once cashed a 16-cent check would spit at.
And Serta announced it would stop selling its Trump-branded mattress, which, according to Trump’s FEC filings, brought in another $1 million and $5 million in royalties every year.
Harwell wrote that in the past 2 weeks DJT, “Trump Media & Technology Group’s share price dropped from $66 after its public debut last month to $32 on Friday” but for the MAGA true believers “Truth Social is less a business calculation than a statement of faith in the former president and the business traded under his initials, DJT. Even the company’s plunging stock price— and the chance their investments could get mostly wiped out— doesn’t seem to have shaken that faith. The company has lost $3.5 billion in value since its public debut last month.”
As a business, Trump Media has largely underwhelmed: The company lost $58 million last year on $4 million in revenue, less than the average Chick-fil-A franchise, even as it paid out millions in executive salaries, bonuses and stock.
And in two years, Truth Social has attracted a tiny fraction of the traffic other platforms see, according to estimates from the analytics firm Similarweb— one of the only ways to measure its performance, given that the company says it “does not currently, and may never, collect, monitor or report certain key operating metrics used by companies in similar industries.”
But for some Trump investors, the stock is a badge of honor— a way to show their devotion beyond buying Trump merchandise, visiting Trump golf courses or donating to Trump’s presidential campaign.
…Trump Media has boasted that it has benefited from a flood of “retail investors”— small-time and amateur shareholders betting their personal cash. Its merger partner, Digital World Acquisition, said its shares were bought by nearly 400,000 retail investors, and Trump Media’s chief executive, Devin Nunes, told Fox News anchor Maria Bartiromo on Sunday that the company had added over 200,000 new ones in the past couple of weeks.
…Many of Truth Social’s investors say they’re in it for the long haul. Todd Schlanger, an interior designer at a furniture store in West Palm Beach who said Trump had been one of his customers, said he’s invested about $20,000 in total and is buying new shares every week.
Schlanger said he now watches his stock performance every day hoping for positive signs. In a Truth Social post last week, he encouraged “everyone who supports Donald Trump and Truth [Social to] buy a share everyday” and asked, “Do you think we have hit bottom?” (The stock slid nearly 10 percent after that post.)
He suspects the recent drops in share price have been the result of “stock manipulation” from an “organized effort” to make the company look bad. There’s no proof of such a campaign, but Schlanger is convinced. “It’s got to be political,” he said, from all the “liberals that are trying to knock it down.”
…After the billionaire media mogul Barry Diller called Trump Media a “scam” stock bought by “dopes,” one account, @Handbag72, claimed to have bought more shares, arguing Diller didn’t “get it” or was “at risk of [losing] $$$$.” The next day, the account shared a 2021 blog post from the investing forum Seeking Alpha saying Truth Social could be worth $1 trillion in the next 10 years.
But there are also flickers of uncertainty and disenchantment, with some saying they faced thousands of dollars in losses or had “risked [literally] everything.” One user who had posted “Tired of WINNING yet?” earlier this year when the stock spiked posted that this week’s losses were “painful to stomach.”
The user @manofpeace123, who said they bought shares at $65 and that 71 percent of their portfolio was DJT stock, said on Wednesday that investing was a way of telling Trump, “I believe in you and I stand with you through good times and bad.” But a day later, the user added: “can’t help but feel sad. … feel like I’m trying to catch a falling knife.”
Another account, @realJaneBLONDE, posted on Sunday that she was “NOT panicked NOT worried” before, two days later, posting a message to Trump and congressional Republicans urging them to make it “illegal” to bet against or short-sell stocks.
“Sick of MY investment money being stolen!!” she wrote. “They’re stealing peoples money and you’re allowing it!!”
Some users said they were “baffled” by the stock’s ups and downs, and one asked for advice on how to tell her husband she didn’t want to sell. One user posted a meme image saying, “If you’re worried about your Money, Remember This, DJT stock is about FREE SPEECH & Without FREE SPEECH Money won’t mean much.”
But other users saw such questions as displays of unacceptable doubt. When the user @seneca1950 asked whether anyone was concerned that the company’s upcoming plans to issue tens of millions more shares would sink the stock price, two accounts criticized the account for spreading “FUD” — fear, uncertainty and doubt.
…In moments of apparent despair, some users work to lift one another up by arguing that they are enduring the same kinds of “deep state” attacks that had long shadowed Trump himself. When user @BingBlangBlaow said they were embarrassed to be so “deep in the red” and questioned why “everyone [was] acting like everything is fine,” Chad Nedohin, a Canadian investor and prominent cheerleader of the stock on Truth Social and the video site Rumble, responded, “No [one’s] fine with it, but we are DJT now. The deep state is making their run at Trump… and us.”
The user, however, posted afterward that the argument left him unconvinced. “I’m tired of blaming the deep state,” he said. Later, he added, “You would think that the ‘biggest political movement of all time’ would want to support the man leading it and get much better numbers than” this. (The accounts did not respond to messages and offered no way to contact them.)
Marjorie Traitor Greene bought in early and sold her stock as it started crashing but has refused to say whether or not she’s now shorting it to make back the money she lost on her original investment. There’s little doubt that DJT is headed toward becoming a penny stock.
