So according to the cite from Kevin Drum, Trump has $4 billion (with a B) worth of shares in Truth Social.
Doesn’t that solve all his problems?(Even though it is locked for 6 months.)
What am I not understanding?
It’s locked for 6 months as you said. And there is no guarantee it will hold that value for 6 months.
He has to get a bond worth $450+ million together by the end of the month. Any lender who will take the value of his Truth Social holdings as collateral is a fool in my book.
Those plans for the monetization of Truth Social are (IIRC) currently being challenged by Trump’s minority partners who are arguing in court that Trump is trying to unfairly water down their shares prior to the combination. Which, IMHO, is a plea to "You can buy us out NOW (at some higher price) and make the problem go away, or we can keep this in court forever, where you just may well lose.
Over the past 5 days, DWAC has traded in a range from 39.63-49.92: the high is 26% above the low. Multiply the number of shares by the today’s price and you get $1.5 billion, the market cap. DWAC is a SPAC, a holding company that has about $310 million of cash that they plan to buy Truth Social with. Truth Social is unlikely to be worth $310 million.
The stock price was under $20 all throughout 2023: it only shot up after the Iowa caucus. I don’t think it’s being driven by smart money. So yes, that market cap is highly highly speculative.
As a former options trader, I was curious about the pricing of put options on the first day the stock trades as DJT.
If you’re not aware, put options give you the right to sell a security at a fixed price on or before a fixed date. Basically, if you think the value of that security is going to go down, you can buy a put option to place a bet on that outcome. If you’re right, you can multiply your money several times over; if you’re wrong, all you lose is the premium you paid for the option.
Most investors buy puts as a hedge against the value of the stock they own. But when a stock is difficult or impossible to short – as DJT is – buying puts is the only way most investors can bet against a stock. The more doubt people have about a stock, the higher the volatility, and the higher the prices on puts will be.
So … DJT put prices aren’t the craziest I’ve ever seen, but they’re pretty crazy. The stock closed at $58 today. Some highlights:
- April26 40 puts (sell stock at $40 by April 26) closed at $9.10. So if you think the stock will be below $40 by the end of April, you can buy that put and your break-even would be $30.90 – almost a 50% drop from today’s close in just five weeks.
- June21 40 puts (sell stock at $40 by June 21) closed at $16.00, just $7 higher than April but buying you almost two more months. So your break-even would be $24. This seems like a good buy to me.
- Sept20 20 puts (sell stock at $20 by Sept. 20) closed at $8.27. So think about that. Six months from now, when DJT can sell his shares, you’re looking at a break-even of $11.73. The stock has to lose 80% of its value for your bet to be a winner.
- Sept20 2.5 puts (sell stock at $2.50 by Sept. 20) closed at $0.23. If you think the stock will be worthless in six months, 23 cents will make you $2.27.
TLDR: Wall Street is skeptical, to say the least.
ETA: I should have added earlier that all option prices should be multiplied by 100, because they give you control over 100 shares. Therefore, $9.10 in first example above is actually $910. $0.23 in the last example is actually $23.
All profits are, naturally, also multiplied by 100.
First thanks to @Akaj for trying to explain to those unfamiliar like myself the intricacies of selling off his (vastly overpriced IMHO) stocks.
Here to share a Legal Eagle video of the various scenarios of Trump paying / not paying / getting a muskrat-shaped unicorn to pay / etc his ongoing judgements:
Short version, he feels that the reduction to $175 million was understandable given the difficulties of recovery of the real estate assets posed so much difficulty in posing a bond (a pretty neutral evaluation), but that all said and done that even the reduced amount may be challenging unless a third party (Musk / Saudis / Russia) stepped in. And noted a clip where a Trump representative didn’t rule the second two out.
No new information, but a pretty good summary.
Awesome thanks. I don’t have enough confidence in my abilities to actually risk real money, but I do think that the Trump media stock is likely to tank, as soon as Trump sees an opportunity to pull his money out, (or maybe a few days later), so Sept 20 is just a bit too early. But I’m willing to smack down 20,000 Quatraloons from my fantasy acount on a put option of around $20 On October 1st, and keep track of them just to see how I did.
I am curious if there are any quotes around that? Of course Trump media is currently trending down from when it was that you made this post so I my have got in a wee bit late.
I only had a few minutes to check, but the April puts actually went down in price despite the stock’s drop. My guess is that there was pent-up volatility around whatever today’s news was, so even though the news was bad it removed some of the short-term uncertainty.
The June puts that I called a “good buy” above stayed about unchanged. Which means I would have done well buying the “spread” by selling the Aprils and buying the Junes. Dang.
Is there a publicly accessible site where you can see these? I love looking at data. 
Side-stepping his judgements and the apparent inability for Trump Org to operate without cheating (while we wait for Thursday 
) , I’ve been trying to get information on which properties and liabilities Trump will need to refinance in 2025 - I’ve only seen one on Forbes, but it’s paywalled. Does anyone have a sub and can give us a summary, or found another non-paywalled link?