Trump: Follow the Walnut Shells, er, Truth

Rep. Devin Nunes announced last night that he is leaving Congress by the end of this month/year to take a job as CEO of Trump’s new media empire. Note that Nunes, who once sued the Twitter account of Devin Nunes’ cow, is the senior Republican on the House Ways and Means Committee and would have become Chair if the Trump Party takes over the House next year. This is considered one of the most powerful positions in Washington. But Nunes, if not the cow, is moooving on to greener pastures.

Okay, maybe not. The media empire appears to be just another Trump scam. Judd Legum writes that Trump’s new media company is a $1.6 billion mirage that appears to be designed to let Trump get his hands on investors’ money without ever delivering a product.

One, at the moment Trump’s signature “social media” site exists as a static page that collects email addresses. A Beta version had been promised in November, but this is all there is so far:

What is known: The Trump Media & Technology Group (TMTG) had promised the social media site would be built on “proprietary” technology but later admitted a test site used open source technology already employed by other right-wing sites. Further, Legum writes, the only people known to be involved in building this technology are Trump and Scott St. John, a game show producer who “will supposedly be involved in TMTG’s streaming service, TMTG+, which is supposed to launch sometime in 2023.” Scott St. John is the mastermind behind “Deal or No Deal” and a bunch of other short-lived games shows I managed not to have heard of.

The investor report eventually posted a “technology team” that consisted only of first names and initials — Josh A., Billy B., Vlad N., and so on. I thought I found a woman’s name — Mortada A., a designer — but it turns out this is a man’s first name in Egypt. Anyway, there is no way to check if these guys are real people or not.

Devin Nunes is real enough, but his only known technology/media management experience is suing the fake Twitter cow.

Even better — Matt Levine writes at Bloomberg that The Trump SPAC Did a PIPE. Yeah, I didn’t know what any of that meant, either. Investopedia says that a SPAC — Special Purpose Acquisition Company — “is a company that has no commercial operations and is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring or merging with an existing company.” And “Private investment in public equity (PIPE) is the buying of shares of publicly traded stock at a price below the current market value (CMV) per share,” Investopedia says. This is done to raise capital for the public company, although it dilutes the value of shares. Further, PIPEs aren’t subject to as many regulations as other investment transactions. Keep that in mind.

In this case, the SPAC is Digital World Acquisition Corp. (DWAC), which first came into existence this September. DWAC “raised $287.5 million by selling stock to investors at $10 per share,” Levine says, even though DWAC didn’t have anything to sell yet. Then in October, DWAC announced it had merged with TMTG. So DWAC is Trump’s SPAC. Levine continues,

“Trump Media & Technology Group (‘TMTG’) will soon be launching a social network, named ‘TRUTH Social,’” said the merger announcement, promising a beta launch in November. It missed that deadline. A test version of the site seemed to be just a clone of open-source social network Mastodon. TMTG’s website has a “company overview” slide deck that contains no business information and does not mention anyone involved in building its supposed technology. “This appears to be a shell company buying a shell company,” wrote Dan Primack.

Ooo, are we watching a shell game? Hey, grifters gonna grift.

Levine explains that as of yesterday, TMTG was valued $44.97 per share. And TMTG is selling stock — to DWAC — at $10 per share. In so many words, Levine says this is weird. Levine also suggests this investment — apparatus? structure? — is being set up so that Trump can keep investors’ money even if the social media empire never launches.

The grifters in The Producers had to put a real musical on the stage in hopes it would fail. This is even better; Trump doesn’t have to bother to put a real social media site on the web.

A couple of days ago, Trump announced that TMTG and DWAC the SPAC have $1 billion in capital pledged by institutional investors through subscription agreements. I don’t know if there’s any proof of that, other than Trump’s say-so. These investors have not been identified, which Forbes says is unusual. (One investor who has been named publicly is Marjorie Taylor Greene, who is reported to have given DWAC as much as $50,000.)

Elizabeth Warren, bless her, asked the SEC to look into the relationship between TMTG and DWAC over potential violations of securities laws. And the SEC is doing so, although it’s hard to see if anything will come of it.

Even so, somehow I don’t think Twitter is too worried about the potential competition.