Originally published at: Trump Media Made a Deal That Could Secure a Major Financial Windfall for the GOP Candidate
This article first appeared at ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox. After markets closed the day before the Fourth of July holiday, former President Donald Trump’s social media company made a disclosure that got little notice. “The…
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Trump Media declined to answer detailed questions
That’s what Trump does. Hides.
It’s called a scam.
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He dodges yet another bullet.
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Can somebody explain this Yorkville situation even more simply for my benefit? Why is it necessary? What does it make possible that was not possible before?
The article says:
The basic arrangement works like this: Trump Media has the option to sell Yorkville shares of itself up to $2.5 billion, a significant chunk of its current market value. Yorkville was paid a fee up front, and if Trump Media decides to sell shares, Yorkville will also get a discount — 2.75% — off the market price. Yorkville typically would turn around and immediately sell those shares to other buyers, pocketing the difference.
I think I understand Yorkville’s upside: they get a cash payment now, and if the stock starts selling later, they get a cut. And if it doesn’t sell, they keep the up-front payment.
But why does TMTG need this? Why can’t they just sell shares directly to investors now, without Yorkville? Why share the profits with anybody?
Does roping in Yorkville somehow circumvent the lockup agreement, which “prevents Trump from personally selling his shares in the company until late September”? Why would that be the case? Why doesn’t this completely undermine whatever larger equities the lockup agreement is supposed to protect?
It looks to me like this is just one crook getting another crook to co-sign his forged hall pass so they can break the rules he promised to follow originally. An utterly transparent dodge.
Am I missing something?
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Yes it is. So the question we must ask if Don the Convicted wins reelection is if scamming people out of their money an “official act.”
The good news for the Orange POS is 2 members of the Supremes’ have no problem with grifting.
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And yet that MF goes out and says he wouldn’t defend Taiwan if China decides to invade (so Presidential!), and shares on the S&P and NASDAQ tanked.
Shot his mouth off and people’s 401K’s took a hit.
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Scam??
Psshaw!! When has he ever been anything but above board?!?
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What’s with all these people who still have a problem with ‘norm-busting?’
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Thanks for this thought experiment. This is way above my pay grade. But I can smell and tell a scam when and how it is presented.
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Is there even any such thing as stock manipulation any more? Asking for a friend.
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No. Those are official acts. And if he says it publicly then you cant use it to investigate or assume intent on anything else.
Just like running a hotel that caters exclusively to russian, saudi, and other foreign interests. That also contains the presidents library (such as it is, just state secrets, intel sources, and us journalist doxxing info), available for review or xeroxing by anyone for a nominal fee.
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Spend all they want, everyone outside the 30% cult followers hates trump.
Besides, they’re grifting the money for themselves not using it for ads and GoTV.
So don’t let that scare ya.
And don’t forget the Russian Dressing on all the word salad.
All the Biden naysayers are emotional, Biden team seems to be more strategic.
I could be wrong, but seems that way at this moment in time.
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Theres a lot of money to be made extorting our allies and even more to be made shorting the stocks that will be most impacted.
And best of all - official acts.
Any journalists that decide to do their jobs will simply be cut to pieces or disappeared in exchange for some US/allied nuclear secrets.
Vote life your life depends on it.
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Thanks for the effort. Really. But even the explanation makes no sense to me. Or my friend.
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Because this agreement creates NEW shares that are not locked up. Once the shares are sold the proceeds go to the company, which he would still control.
From there he can do any number of things with the cash, including paying himself royalties, advertising or brand license fees to move the money from the corporate to personal bank accounts.
This assumes they dont do outright fraud, but inflated expenses, and other illegal means are also possible once the stocks are sold.
And due to recent supreme court decissions, companies have more leway to deviate from GAAP and invent their own accounting rules so its less likely to get caught by SEC.
The reason to do it this way is probably because this isnt expressly forbidden by his current contracts and/or litigation with the other founders, which are sueing him for fraud. Ive not heard anything about that case for awhile.
And he has to use a shady company, probably located in the same plaza as one of his lawyer’s offices, because there are NO fundamentals by which anyone should be buying this stock - it loses money, has tons of unpaid bills, as well as legal exposure for failing to update their mastodon code, they havent applies security updates, and have even fewer advertisers than the failure that has become Twitter.
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And if you can, canvass, phone bank, write letters, what ever you can do, do it.
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Trump Media CEO Devin Nunes, the Republican former congressman, suggested any share sale would be used to buy assets to build the company’s business. “We’ve secured a great deal to guarantee access to additional capital, if necessary, to pursue big strategic opportunities as we look to build out our portfolio by acquiring assets and technologies in the Patriot economy,” he said.
Assets such as … more branding rights to use Felon-One’s name. And “services” from his business entities, direct and indirect.
The company would have no obligation to spend the money purchasing an asset. It could distribute cash to shareholders — including Trump — in the form of a dividend, for example.
Nah. Too much like regular taxable income. He’s going to structure the whole thing in such a way that, not only does he never pay a penny in tax on his boodle, he’ll end up with a fricking deduction at the end.
And the “little guy” shareholders will get soaked. Deservedly so, for the most part, but definitely soaked. With a fire hose.
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Call me an old fashioned corporate lawyer and CPA, but in my opinion the bottom line on a company is losing money and has no revenue is that the stock is worthless.
The closest comparison I can think of is the Green Bay Packers selling “souvenir” stock that was worthless and offers nothing but historical and sentimental value.
That is my Green Bay Packer stock is worthless but because of it the team was able to repair Lambeau Field and hopefully win the next super bowl.
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“These outlandish and nonsensical conspiracy theories about TMTG’s routine, transparent business practices constitute legally actionable defamation, and we will take legal action in response,” a Trump Media spokesperson said in a statement.
Good to see all things related to DT are turning down the heat.
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