Donald Trump’s social media company could go public as soon as next week, paving the way for a potentially huge windfall for a former president who raked in tens of millions of dollars the last time one of his companies was listed on a stock exchange.
That decades-ago previous experience, however, did not end well for the company or its investors. While a 2016 Washington Post review found that Trump made over $44 million, the company — Trump Hotels and Casino Resorts — lost more than $1 billion and ended up in bankruptcy.
This time around, there’s at least one similarity between the two ventures separated by decades. The newly merged company that’s set to go public, Trump Media, will be listed on the Nasdaq stock exchange with the letters DJT, Trump’s initials. Trump Hotels and Casino Resorts used the same stock ticker when it went public with great fanfare in 1995.
“It’s going public and we’re really very happy about it,” Trump told reporters almost 30 years ago. “It’s going to be a great day.”
The Atlantic City, N.J., company lost money every year, but its stock prices did well — for a time. In the initial public offering, the company raised $140 million, selling 10 million shares at $14 each.
By 1996, the stock reached a high of $35 a share before plummeting later that year, in part because the company bought another casino for $100 million more than its estimated $400 million value, The New York Times reported in 2016.
The company, meanwhile, kept bleeding cash. The year the stock peaked, it lost $66 million. In 1999, it lost $134 million. And in 2004 — when the company filed for Chapter 11 bankruptcy protection and was delisted from the New York Stock Exchange — it lost $191 million, according to a CNBC review.
A spokesman for Trump’s campaign did not return a request for comment.
Trump, who was the company’s chairman and later CEO, continued making millions of dollars a year in salary and bonuses despite the heavy losses.
The business helped pay for aspects of his famously lavish lifestyle, including spending over $6 million to entertain guests on his plane and golf courses, according to The Washington Post report. He also used company cash to buy Trump-branded merchandise, including $1.2 million on Trump Ice bottled water, the report said.
Trump’s new venture is centered on his social media platform, Truth Social. Shareholders in a company called Digital World Acquisition Corp. voted Friday to approve a merger with Trump Media & Technology Group, the private firm that owns Truth Social.
Under the merged company, Trump would have nearly 80 million shares, worth around $3 billion. DWAC shares on Friday closed nearly 14% lower than their opening price.
The impending IPO comes as the presumptive GOP presidential nominee is experiencing a very public cash crunch. Earlier this month he posted a $91 million bond to pause writer E. Jean Carroll’s defamation award against him while he appeals it.
Trump has also been attempting to get a bond for a similar pause on New York Attorney General Letitia James’ $464 million civil fraud award against him, his companies and co-defendants. His lawyers have told an appeals court that he doesn’t have enough cash on hand to secure such a bond.
If he does not post a bond by Monday and an appeals court doesn’t intervene, James will be authorized to start seizing his assets. Meanwhile, in a Truth Social post on Friday, Trump said, “Through hard work, talent, and luck, I currently have almost five hundred million dollars in cash, a substantial amount of which I intended to use in my campaign for president,” indicating he has the means to obtain a bond.
It’s unclear when exactly Trump would be able to cash in on the upcoming listing for his social media company. Under the deal’s terms, Trump is prohibited from selling shares in the merged company for at least six months. But the board of directors, which will likely include his eldest son, Donald Trump Jr., could vote to allow the former president to sell shares earlier than that.
Source: | This article originally belongs to Nbcnews.com
