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How much will Trump net from DJT?

Wrestleknownothing
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Wrestleknownothing Big Brain

Wrestleknownothing

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Donald Trump's 180 day lock up on his DJT stock expires on Saturday, September 21. That means he can start selling his stock on Monday, September 23. 

How much do you think he nets on the sale? Or does he keep the stock and run the company?

That seems unlikely. After all, the company hemorrhages money. In Q2 it had yet another operating loss, this time of $16.4 million on revenue of only $837,000. It has never had $1 million in quarterly revenue.

But there is a lot of cash on the balance sheet. They have about $344 million in cash. That is earmarked for building out their streaming platform, but maybe he folds the tent and pockets whatever cash is left? Hard to do with public shareholders, but Trump does not mind a law suit. This we know.

Trump owns something like 114,750,000 shares. That is about 57% of the company. His pro rata slice of the cash would be $196 million, assuming they stop spending that cash. But the company has a market cap of about $3.5 billion right now. So wouldn't he be better off selling? After all 57% of $3.5 billion is about $2 billion. And $2 billion is greater than $196 million.

But that kind of depends. "Right now" is a very pregnant term. The market has been anticipating this day. DJT has been trading persistently down for over a month. After reaching the mid-40's in July, DJT is below $18 today. The average daily trading volume for DJT is 7.9 million shares. Trump's holdings therefore, represent about 14.5 days of average volume. But you can't just sell the ADV for 15 days and expect to get today's price.

If you are an institution, for example, trying to liquidate a concentrated position you typically limit yourself to under 10% of the daily volume to minimize/manage your market impact. At 10% of the volume we are now talking about 145 trading days for Trump to sell. But here is the thing. As a company insider who owns the majority of the company he has to file his plans to sell. That kind of information about selling leaves a mark, especially from someone as ingrained in the company as a man whose initials are its ticker symbol. It is bound to have a negative effect on the price. 

So what do we think the average price will wind up being? $196 million divided by 114.75 million shares is about $1.70 per share. Can he get more than that? If so, sell with both hands. But what if he starts selling and it is a race to zero? Does he liquidate the company and go for the cash? Does he run the company and count on Devin Nunes?

So many fun possibilities over the next few weeks.

Drowning in data, but thirsting for knowledge

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Wrestleknownothing Big Brain

Wrestleknownothing

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Interesting afternoon in DJT. Starting about 30 minutes ago someone (or someones) have been on a buying spree. Volume spiked along with price. About 8 or 9 million shares have traded in the last 30 minutes (vs an averge daily volume of ~8 million) and the price went from 16.25 to 21 before reverting some to 18.60.

Curiouser and curiouser.

Edit: just saw DJT says he is not selling DJT when the lock up expires. Should you believe him this time?

Edited by Wrestleknownothing

Drowning in data, but thirsting for knowledge

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Wrestleknownothing Big Brain

Wrestleknownothing

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BTW this raises another fascinating possibility.

When Elon Musk was buying Twitter stock he clearly violated securities laws by not filing with the SEC when he breached the 5% threshold. He did finally file once his position was north of 9%, but the SEC has declined to charge him with any violation (though he is facing investor lawsuits over it).

Would the SEC charge Trump with securities violations if he started selling DJT even after he has publicly stated he would not (as an insider he has a different obligation with regard to his statements about intent than just a regular shareholder)? And would they charge him if he failed to file the proper documentation to sell (Rule 10b5-1)?

Drowning in data, but thirsting for knowledge

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Caveira NCAA All-American

Caveira

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4 minutes ago, Le duke said:


When was Trump charged with securities crimes?


Sent from my iPhone using Tapatalk

 

There is a would   And a if in wkn’s question   

 

1 hour ago, Wrestleknownothing said:

Would the SEC charge Trump with securities violations if he started selling

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Wrestleknownothing Big Brain

Wrestleknownothing

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I have an alternate theory.

Theory #1 was Trump exits as soon as humanly possible. It is all found money. Get whatever you can. It certainly won't be billions, what with trying to sell 60% of the company. But the market has already anticipated this as the stock has slid hard in front of the lockup expiration.

But Trump declared he will not be selling. So either he sells anyway and has to deal with certain litigation for securities fraud, or he does hold on. But with less than $4 million of annual revenue and something like $50 million of annual losses, what are you holding on to?

Then it hit me. Bribes. If you are looking to influence a president what better way than to send wads of cash to his company, legitimately, by buying wads of services? And services are so much better than goods. Goods are inefficient. Goods have to be manufactured. Goods have a cost for the producer. Then goods have to be shipped. And where will you keep all those Trump bibles, and Trump hats, and Trump books? No, services are where it is at.

And what better service than advertising? Advertising is so much more efficient. Money flows in one direction and nothing (?, good will? influence?) flows in the other direction. The marginal cost to host another ad on your site is just about zero (I think we are all living that experience now).

Say you are Vladimir Putin and you really want the US to back off on all this Ukraine support, what can you do about that? Well, if the Greater Moscow Tourism Bureau were to buy $100 million of advertisements on Truth Social, what would be the harm? Just promoting good will between our two countries. 

Yes, advertising is the game if you want to bribe a president. Fortunately, Trump is too principled in too many ways to cheapen himself in that way. When I think of Trump, I think faithful. Ask any of his wives. If you can find Melania, that is.

Drowning in data, but thirsting for knowledge

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