Equities and Ironies: Trump, Law & Politics

[Note to Readers:  In this era of wayward ‘truths,’ the field of play for irony has both spread and thickened.  Every now and then, it is worth noting the spawn of this fertile soil, for the record.]

Let’s begin with this one.  In the same week that a former US president is being tried in a criminal court for the first time in history–for the alleged crimes of falsifying business records in his effort to hide incriminating sexual evidence from his voters a scant few weeks before the 2016 presidential election–he is  fleecing these same voters with a new stock scam meant to support financially his deepening legal fees and his 2024 campaign to return to the White House.

The least of the irony is that on the trial’s first day last week, the former president called the case against him “a scam.”  The case centers around the “hush money” payment of $130,000 he made through his attorney to the adult film actor, Stormy Daniels, to buy her silence just prior to the 2016 election about the affair she says the two had in 2006 just after his baby son was born.

And therein lies another slice of irony.  After the first day of the trial, Trump complained on his social media platform–Truth Social–that the judge would not permit him to attend that son’s high school graduation in May because he would have to be in court.  (In fact, the judge simply declined to decide that matter until later.)  This would appear to be an instance of the “what goes around comes around” irony.

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And that brings us to the scam that is Truth Social.  Last month Trump put Truth Social–until then his private social media platform–on the market, offering shares of stock in it to the public so as to enrich himself.  Given some wealthy insider investors in the stock and his fervent base of political followers around the country, the price for a share of stock reached $79 on the first day of the sale, immediately netting Trump himself $5 billion (for the shares he owned).

And this burst of wealth despite the facts that in 2023 his Truth Social company had not only made no profit, but it had lost more than $58 million.  Unsurprisingly, the stock bubble quickly began to burst, reaching a low of $23 a share last week for a 70 percent loss of investment value since the stock first was sold.  A company whose value is based mostly on the “Trump brand” rather than on its business operations is going to have volatile share prices, especially as that brand waxes and wanes with Trump’s shaky future in American courts and at the ballot box.

Last week’s drop still left Trump with holdings in the stock worth more than $2 billion on paper, but left many outside investors–Trump’s non-wealthy MAGA supporters who invested in the stock to show their loyalty to Trump or on their blind faith in his alleged business acumen–with losses that they can ill-afford.  These retail investors apparently number in the hundreds of thousands.

One of them, Jerry Dean McLain, first invested in Trump’s social media platform two years ago when it was planning to merge.  Then the share price was $90.  Thereafter he kept buying the Trump shares until he had spent $25,000, basically, he said, his “whole nest egg.”  With last week’s large drop in the value of the shares, that nest egg had lost more than half of its value.

But McLain is not discouraged.  “I know good and well it’s in Trump’s hands, and he’s got plans,” he said.  “I have no doubt it’s going to explode sometime.”  Other investors have insisted on Truth Social that investing in the stock is about “good vs. evil,” and that the company’s stock would ultimately “triumph over” liberal critics who have been “brainwashed beyond repair” or who had conspired to undermine the stock’s value. This is just the sort of faith that obscures Trump supporters’ views of his business considerations, just as it does of their own self-interested and moral considerations at the ballot box.

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Trump’s company itself has produced a number of signals that it was a balloon soon to burst.  The shares in the company were made available to outside investors through its merger with a special purpose acquisition company (SPAC),¹ a move that is commonly used to avoid government rules requiring disclosures to investors.  Second, last week the company announced that it planned to issue tens of millions of new shares in the company, further diluting the value of the shares already purchased by the outside investors.

Third, the company’s first annual report to shareholders–released on April Fools Day no less–declared that the company would not even collect, let alone report, information that media companies and investors need to assess their business performance.  Information such as “average revenue per user, ad impressions and pricing, … monthly and daily active users.”

And here is the final irony:  All of this financial scamming is apparently legal.

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Epilogue:  Some readers may have thought that the essay’s principal title, “Equities and Ironies,” sounds familiar.  It may even have brought to mind the wonderful 1982 Paul McCartney/Stevie Wonder song, “Ebony and Ivory.”  The song title was indeed the inspiration for the essay title.  But, again, the relationship between the two is twisted in irony.  The song spelled out the hope for true racial integration.  It stood for so much of the human decency that Trump and his supporters oppose.  And it sharply contrasts with Trump’s own rank racism.  In addition, equity refers to the value of ownership shares in a company, but also to fairness and impartiality in human affairs.  Again the irony, especially in reference to the Trump legacy but also to other realities of the economic marketplace in which the former president has for so long comfortably made his corrupted home.

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1. A SPCA is a blank check company that acquires funds from investors in order to acquire an existing company that it finds attractive.[↩]