Benzinga - by Shanthi Rexaline, Benzinga Editor.
As Trump Media & Technology Group Corp. (NASDAQ:DJT), the newly-listed media company of former President Donald Trump, plummeted over 21% on Monday, his niece Mary Trump suggested there’s more to the company’s public debut than meets the eye.
Campaign Windfall: According to Mary Trump, TMTG, the parent of the Truth Social platform, could potentially serve as a “front for a campaign finance scam.”
In a Substack post, she questioned the company’s $10 billion valuation, considering its reported annual revenue of merely $4.1 million and $58 million in losses.
“The Trump Media merger with Digital World Acquisition was a massive infusion of cash to Donald — a gift masquerading as an investment,” she said.
Mary Trump underscored the regulations governing campaign donations, noting the limits set by the Federal Election Commission (FEC) and the transparency required for donors.
“Now that Truth Social is a publicly traded company, however, supporters have a new, surreptitious way to back Donald financially without having to make a direct political donation. And thereby bypassing FEC donation limits and disclosure requirements,” she said.
For his supporters, it is a win-win proposition, Mary Trump said, adding that if the stock gains, they profit out of it, and if it falls, they can write off the loss as a tax deduction.
She pointed out that her uncle will be free to sell his shares or leverage them for a loan in September, just before the election.
Foreign Threat: While FEC laws prohibit foreign nationals from contributing to political campaigns, they do not apply to the purchase of publicly traded stocks, Mary Trump said. Foreign governments can potentially buy TMTG shares to take a stake in the media company, and Donald Trump would be obliged to do them a favor, she said.
The psychologist and podcaster said massive amounts of cash funneled to her uncle from the sale of shares can help him use it for his cash-starved campaign.
A Financial Times report said Pro-Joe Biden groups entered 2024 with $118 million on hand compared to $66 million in possession by Donald Trump’s team. By the end of February, Biden's campaign and the Democratic National Committee had more than twice as much on hand as Trump and the Republican National Committee, it said.
The report also noted that Biden became the first president in history to raise more than $1 billion from donors in the 2020 election and outraised Donald Trump then. “Money matters in US elections; the congressional or presidential candidate with the most typically wins,” it said.
Mary Trump said, “The potential for U.S. donors and foreign governments to circumvent FEC laws by buying Truth Social stock is a great cause for concern. The identity of those providing financial backing to Truth Social–and the extent of that backing — may be difficult to ascertain.”
“This lack of transparency could, in turn, have serious implications for our democracy — as Donald becomes beholden to our nation's adversaries.”
Plan Might Be Backfiring: As TMTG shares fell after the company’s 2023 abysmal performance, Mary Trump said the “scheme might already be backfiring.”
“Without a solid financial foundation — which has never been the case for Truth Social — the company's ability to operate, let alone pose a threat, is significantly compromised,” she added.
“Donald’s bubble pops,” Mary Trump said, as she noted his net worth already shrunk by $1 billion with Monday’s plunge in TMTG stock. “Donald's supporters have very likely just watched their money go up in flames,” she added.
The psychologist also said “Truth Social is destined for failure,” given the technical glitches, user interface issues, and a lack of unique content. The user count fell 51% year-over-year, she noted.
“When we look even an inch below the surface of Donald's alleged success, all there is to see is unmet promises, lies, and failure. When investors saw the truth, they ran,” Mary Trump said.
Read Next: Trump’s Niece Says Biden’s Massive Fundraising Success A Signal He’s ‘Formidable Contender:’ ‘Donald Is Finally Losing Ground’
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