But It Was A Great Way for Investors to Avoid Inflation
Most Trump watchers of the early 21st century learned to avoid any publicly traded stock offering having Donald Trump at the helm, i.e., Trump Entertainment Resorts, Inc. Yes, was his Atlantic City casinos era, during which he managed to underperform the casino industry in a world famous manner. Rookie mistakes like saturating the casino market with multiple casinos to his own disadvantage, taking on massive. ultimately unpayable, debt, filing his company for bankruptcy a legendary four times. Of course, he – shameless – did well financially by having no real financial stake in his own company, yet, he siphoned off revenue from operations for himself in salaries, bonuses (for what?), licensing fees, and other sneaky deals. And, then, as now, he blamed others, lied outrageously, stiffed contractors, and all in all built the Donald Trump we know, the orange man-boy who would be king. (For a fine walk down casino lane see here.)
VOX’s Matthew Yglesias observed:
“Mom-and-pop investors who had the misfortune to put their confidence in Trump lost nearly everything. [see chart below] But as a performance of low cunning, his stewardship of THCR really did verge on genius. The company itself was a dumpster fire, losing money every year Trump served as chair. But he managed to personally pocket $44 million in salary and bonuses. Even more egregiously, he offloaded personal debts onto the corporate balance sheet and had the public company purchase services ranging from bottled water to plane flights from Trump’s privately held enterprises.”
Here’s an example from a regulatory filing, as you can see by comparing it to the stock price further below, the stock value was nearing single figures, down from its high of $240/share.
So, while the casino industry as a whole did well during the Trump era, Trump managed to quickly and forevermore collapse, basically due to both financial and management incompetence, and most of all chicanery, greed, and self-promotion at the highest levels.
Meet the New Trump, Same as the Old Trump
Those too young or too forgetful have yet to learn these lessons of the past as they lately dove into the shares of Trump’s second Wall Street adventure, Trump Media & Technology Group Corp. (DJT) (see my previous post to learn how they’ve fared thus far). Some DJT investors lost 37.8% in first two weeks of trading.
Also, since much of the outstanding shares of DJT owned by large shareholders (Trump owns 58%) are not eligible to be traded before October 1 (called a “180 day lock-up”), the stock available to trade is approximately 25% of total shares outstanding. Thus, with larger shareholders on the sideline, trading has been allowable primarily amongst small shareholders, i.e., by MAGA’s Trump cult investors who have little to no understanding of what they’ve gotten into, and with whom. They’re the ones with losses, by and large. And for reasons alluded to above, and other technical/contractual ones, the outlook for the future is not inspiring. More on that in my next DJT posting . . .
