October 17, 2024
Is the Trump Media rally over, and how some people make so much money so easily?
By "Trump Media rally" we mean the current 90% increase of the share price of the DJT stock. The stock went down 5% today, which begs the question of whether the rally is over for good or is just taking a breather. Below let's take a quick look at what the DJT stock is all about.
The DJT Stock: Billions For Airing the Truth or From True Thin Air
Once upon a time, Trump refused to acknowledge defeat in the 2020 elections. On January 6, 2021 Trump incited supporters to storm the US Capitol in an attempt to stop the transition of power to Biden. Two days after Trump's insurrection, Twitter expelled Trump from its platform.
[Note: Twitter did the right thing. After all, Trump misused the platform to spread lies and conspiracy theories and to promote the insurrection attempt.]
For a normal person, the expulsion from Twitter would have been "bad" or a failure. For the supreme leader of American racism, Trump, it was an opportunity to create its own social media empire by simply creating a copy of Twitter for MAGA supporters and other suckers.
[Notes: Where losers see defeat, winners see opportunities. You don't have to be original; you can adapt and improve what already exists. To make money, find out how others are making it, and find legal ways of copying what they are doing. You don't need to reinvent the wheel. Business is not rocket science.]
In February 2021, Trump and others founded a privately owned corporation named Trump Media & Technology Group (TMTG or "Trump Media"). The mission was to launch a social network and a subscription-based streaming service.
In September 2021, a special-purpose acquisition company (an investment shell company that can raise funds in Wall Street for any purpose), named Digital World Acquisition Corp (DWAC) began trading on the Nasdaq after an initial public offering (IPO) of 25 million shares. DWAC was backed by a Chinese investment company named ARC Capital. Soon after DWAC's IPO, a Chinese holding company named Yunhong Holdings began arranging deals between DWAC and the Trump Media & Technology Group.
[Note: Yes, Chinese companies were behind DWAC and eventually made DJT possible. Incredible, but true. It's all part of the beauty of capitalism, corporate law, and public stock markets, allowing money to create corporate legal that can raise capital. To make money, leveraging the use of corporate law is essential.]
In October 2021, Trump announced that he was planning to merge Trump Media & Technology Group with DWAC. Of course, Trump didn't disclose the Chinese connections behind DWAC. Trump Media and DWAC began raising funds for Truth Social. By December 2021, DWAC and Trump Media had raised $1 billion in private investment in public equity (PIPE) funds.
[Note: Capitalism depends on the ability to raise capital. No ticket no laundry.]
In February 2022, Trump Media & Technology Group officially launched Truth Social. The network is a copy of Twitter for MAGA supporters to share their "truth" socially.
[Note: Our Constitutional freedom of speech together with artificial "persons" (corporations) are a money-maker.]
In July 2023, Trump Media and DWAC paid an $18 million fine to settle a Securities Exchange Commission (SEC) investigation about misleading investors and other irregularities.
[Note: You have to deal with regulators. You need good lawyers.]
On March 22, 2024, DWAC shareholders officially approved the merger with Trump Media & Technology Group. The merger began trading under the ticker DJT. It reached a valuation of $8 billion with shares reaching a price of $62.
In March 2024, shares began to descend in price. In April 2024, the company reported its financial figures for 2023. The company reported $4 million in advertising revenue and $62 million in operating expense ($58 million loss in 2023). In May 2024, the company reported earnings for the first quarter of 2024. The company earned $770k and lost $327.6 million. As of the last week of September 2024, the DJT share price had fallen to $12.15. Shares soon began rising again, and are up almost 90%, trading today at almost $30 per share.
[Note: Economic value is an opinion.]
Is the DJT rally over for good?
No one knows. The future has not been created yet. We are betting a small amount of money that the rally isn't over yet. We are betting that the DJT stock price will reach the $60s again before the elections. The DJT stock is a highly speculative meme stock tied to whether Trump wins the elections or not.
If Trump wins the elections as we are predicting that he will, the Trump Media company will find ways of making tons of money left and right. Special interests including foreign ones will use the DJT stock to funnel funds to the Trump "royal" family. The DJT shares will increase in value. If Trump loses the elections, chances are that the DJT stock will become a penny stock almost overnight.
For us at Creatix, this is a win-win proposition. We'll be happy to lose our small "investment" (bet) and seeing Trump lose the elections. However, we think that Trump will win by a landslide and hope to profit on our bet on the DJT stock. The elections are 19 days away. We'll see what happens.
Live well. Die better. Enjoy.
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