The news over the weekend (Financial Times) that Donnie Dotard's Twitter-like startup "Truth Social" raised $1 billion from "unidentified investors" - made me wonder how savvy these investors were. Or if they were just another gaggle of gullible pro-Trump clowns played by the most infamous grifter in American history.
Recall that the launch of Truth Social was met by much media fanfare back in October, but it looks like it has all the aspects of yet another Trump con - with the marks all the investors, as well as the delirious Trumpkin users. But why would anyone have believed anything else from this serial grifter and liar?
But maybe it was in the cards all along. After all, shares of the blank-check company ( Digital World Acquisition ) tied to Donald Trump’s online network surged 8 weeks ago, implying a valuation of several billion dollars for the new firm following a buying frenzy fueled by then individual investors on social media. At one point shares more than doubled to $94.20, after trading as high as $175. Trading in the stock was heavy, prompting a number of brief trading halts.
Little known by many users (or seemingly investors) is that the Trump platform is based on a SPAC.
Also called a blank-check firm, a SPAC such as Digital World is a shell company that raises money and lists publicly with the goal of merging with a private company such as Trump’s. The private firm then replaces the SPAC in the stock market. SPAC mergers have become popular alternatives to traditional initial public offerings and have allowed startups with scant records to list publicly
The gains for Digital World (DWAC) are unprecedented even for SPACs, which are known for wild share-price swings and exploded in popularity early this year alongside meme stocks.
At this point, by all the laws of politics, Donald Trump should be radioactive. He lost his re-election bid in November 2020 and his subsequent coup attempt failed. He’s had a lousy record when it comes to expanding Republican Party power, having helped that very party forfeit its House majority in 2018 and its Senate majority in 2020. He continues to face multiple lawsuits and investigations. He’s been barred from Facebook and Twitter.
For Trump, however, politics is a philosopher’s stone. He’s managed to transmute his leaden style — not to mention his countless private failings and professional bankruptcies — into political gold. The big surprise is that so many people continue to fall for such fool’s gold.