The former president is now the majority owner of an unpopular online site worth billions, and the fact of how that happened is rarely that impressive.
Many other people think that making an investment in the stock market is rigged in favor of big investors, big money companies, and other well-informed people. Small individual investors are just as likely to succeed on Wall Street as they are on Bellagio. Donald Trump’s recent ruling will not attract new followers.
Trump merged his small, unprofitable Truth Social platform, which reportedly lost tens of millions of dollars, into a previously created shell company already worth billions. The shell company is called Spac, which is an entity created for a private company on the stock exchange. exchange without making an IPO (and thus avoiding much of the regulatory oversight).
How can a shell company, which does not manufacture anything or produce services, achieve such value?Because the value of their inventory has increased through Trump supporters’ chat rooms and other social media platforms, in the same way as the value of meme inventory. Inventories such as GameStop and AMC Entertainment have increased.
When Trump traded Truth Social’s stock for shell company stock, a price had to have been assigned to those shares and what other means could have been used other than Spac’s falsely inflated market price?So now Trump is the majority owner of a company that costs billions and still runs an unpopular social networking site.
“In the short term, if a lot of people say, ‘I don’t care what it’s worth, I’m going to keep buying it and I’m going to keep supporting it,’ you can do that for a while. “”In a reasonable amount of time,” Harry Kraemer, a professor of mergers and acquisitions at Northwestern University’s Kellogg School of Management, told CBS News. “It almost defies economic logic, but here we are. “
There is nothing illegal about this. People are allowed to buy and sell stocks. Many other people make profits on paper. But, like other meme stocks, the value of Trump’s company is most likely volatile and could simply collapse and investors could suffer the consequences. Guarantees. And it will be the Americans who will pay the price. I bet until then, Trump and his big backers will have taken what they want.
It’s pretty impressive in an ugly sense. But of course, what else would you expect from a New York real estate mogul dealing with New York Wall Street financiers?Can’t you imagine them all toasting at their country clubs in Greenwich and laughing at how they’ve managed to raise huge sums of money by creating billions of value out of thin air?And all this to scratch the back of a guy who will actually do it once re-elected?
Of course, this is all false. But there you have it. Trump rarely does anything new here. The rich will find a way to make those dubious transactions to get rich, while the rest of us are grateful for the 4% earned in our cash market accounts.
What I’ve learned is that individual investors who don’t know the formula or don’t know the formula don’t stand a chance. Of course, there are some outliers who are lucky and motivate Hollywood videos about them. But for the rest of us, the most productive thing is to pay the commissions and let the fund managers play the game for us. These are other people who know. Right now they’re having lunch together. Tonight they will play squash at the Harvard Club.
Taking this technique does not guarantee your profits. But it protects you much more than trying to play this game on your own. This is the genuine fact of all this.