Opinion | Finally, a Sort of Real Number for Donald Trump’s Entirely Subjective Worth

What is Donald Trump really worth to a business?

He's known for making lavish claims about what his “brand” is worth. Others have punctured his estimates as wildly inflated, especially since the reputational hits he took at the end of his presidency. But now we have a new kind of answer, thanks to investors. The Trump aura alone — at least to a media startup — appears to be worth a neat $1 billion.

That’s how much secret financiers are investing in Trump’s newly formed Trump Media & Technology Group, which is going public by merging with a shell company called Digital World Acquisition. TMTG, as Bloomberg Opinion’s Timothy L. O’Brien and Matt Levine explain, has no products, no revenue, no cash flow, no known intellectual property, no big names attached and no “clear business plan,” only a wispy promise to build a new social media network (Truth Social) to take on Twitter, Facebook, Amazon and other tech companies.

And yet the company has excited traders enough to boost its current market value to more than $2 billion. You might think that this means the Trump brand is actually worth $2 billion, but you’d be wrong: The speculative run-up of the stock is a reaction to the $1 billion the Trump brand attracted, not to the Trump brand alone.

Did we say there are no big names attached to TMTG? Well, Trump is chair, and he is a big name. But he has no tech experience and a mixed record, at best, as a company-builder. The second biggest name at TMTG is Devin Nunes, whom Trump just appointed as the company’s CEO. Nunes is a soon-to-retire Republican member of Congress who has degrees in agriculture science and lots of experience running his family’s dairy farm, but no tech background. Sounds like a great starting rotation for a phantom team!

The ridicule that’s gushing down on Trump’s company from the tech and financial press is wholly warranted. Putting money into the company is “is closer to gambling than investing,” says Marketwatch. TMTG has already blown through its promise to produce a beta version of its Truth software by November and the Securities and Exchange Commission has commenced an investigation of whether Trump’s media company had broken securities laws in its formation. All this flakiness gives us a safe harbor the size of the San Francisco Bay to speculate that Trump hasn’t set out to create a viable media business as much as he has dreamed up a new fusion of politics, media and finance designed with one primary objective: To give people who like Trump an easy and legal way to give Trump money.

The way TMTG has come charging out of the gate with no product and no revenue but ample investors has financial journalists comparing it to a meme stock (like Gamestop, AMC and Blackberry) — securities that appeal to naïve retail investors who willingly ignore business fundamentals and buy depending on which way the social media winds blow.

A different point of comparison might be with other ex-presidents looking to cash in on their political celebrity. Trump isn’t the first to board the money-go-round after leaving office. In the first dozen years out of office, Bill Clinton collected $106 million for giving speeches. Barack and Michelle Obama reportedly signed a $65 million book deal. But no former president — and certainly no former president who is preparing to run again — has ever dipped his cup into financial markets to raise the sort of money TMTG has raised overnight.

The prospect of another Trump run again raises fresh ethical issues. Who might the unnamed investors enlisted by Trump be, O’Brien asks in his column? To whom might Trump become financially beholden? Who will have financial hooks into him if he regains the White House? The Saudis? United Arab Emirates? Russian oligarchs? Drug cartels? Any one of these groups would represent a conflict of interest — not to mention a potential national security threat — that would make his Trump Hotel entanglements look like free tickets to a monster truck show.

What, exactly, did unnamed investors buy when they dropped their millions into TMTG? And should we worry about them getting fleeced? No. This is 2021, after all, and even naïve investors know the wretched history of Trump’s bankruptcies, his poor record of running public companies, and his failure to pay back loans. That he’s a stinker of a business partner is deeply baked into his persona by now. Anybody willing to invest with him today has either convinced themselves they’ll find a greater fool they can sell their shares to later at a profit, or has decided that millions of dollars they’ve invested will pay off with favors if he returns to the White House.

Trump’s media company may look like a scam, but you’ve got to admire the way he’s leveraged his name into a billion-dollar cascade that fills his coffers and also gives him a new vantage point to conduct his campaign against other media. “$1 billion sends an important message to Big Tech that censorship and political discrimination must end. America is ready for TRUTH Social, a platform that will not discriminate on the basis of political ideology,” was the way Trump bragged about it in a Saturday press release about a new round of investment.

The size of Trump’s own stake in TMTG remains unknown, but it’s likely to have produced a better short-term payout than the 40 percent of the company the social media site Parler was said to have offered him at the beginning of the year to make it his home on the web. Why share his aura with Parler, he obviously thought, when capturing most of the value of Trumpiness for himself was possible?

Will TMTG end up a financial winner like Trump Tower, or a dud and an embarrassment like Trump Steaks? The 2016 election results are a permanent reminder that nobody should ever underestimate Trump. But does he possess the drive and retain the personal appeal to his fans that convert them into devoted users of Truth Social? Dan Alexander, who has been following the Trump initiative for Forbes, writes that the company could be worth $5.6 billion if it succeeds in attracting about 29 million users (one-third of the 86 million who followed Trump on Twitter), they become dedicated users, and TMTG serves them ads at Twitter’s rates ($186 per user). These are all big ifs, of course. Changing users’ media habits with a new site can be formidable. Parler, launched in 2018 as a Twitter alternative for the right-leaning, had only about 2.3 million active users last December, according to CNN.

In the coming months, as Truth Social goes live and users download the app, we’ll quickly find out if Trump is worth the $1 billion bet investors have placed on him, or if the Trump aura is actually a mirage as TMTG collapses into lawsuits, acrimony and financial penalties extracted by the federal government in Trump University fashion. Either way, you can be assured that Trump will come out of it with a handful of cash. He always seems to.

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Truth Social should market itself as America’s first anti-social media site. Send one-liners to Shafer.Politico@gmail.com. My email alerts miss Orkut. My Twitter feed loved Friendster. My RSS feed clicks only on RSS feeds.