If you’re investing in Trump media stocks, do it because you believe in his ability to help you create wealth. Not because you like the guy.
Look, I like a lot of people, but not very many can lead me to profits.
It seems like common sense, but sometimes it’s easy to get caught up in current trends and political leanings. And when you do that, you can easily lose sight of why you’re investing in the first place: to create wealth.
Now before I go any further, understand, when it comes to Republicans vs. Democrats, I have no horse in that race.
I’m an unapologetic libertarian. And to be honest, I find the whole two-party system to be one of the greatest scams ever perpetrated on our democracy.
But I’m not here to wax poetic about politics. Instead, I just want to show you how you can make a lot more money from one single biotech stock than you’ll ever make from Trump media stocks. And in this case, we’re clearly talking about Trump Media and Technology Group (NASDAQ: DJT). Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
The Trump Media Stocks Dilemma
On October, 2021, a SPAC called Digital World Acquisition Corp. (NASDAQ: DWAC), announced it would take Donald Trump’s social media platform public.
Following that announcement, the stock gained more than 120%.
No matter how you feel about Trump, the bottom line is that this guy has a lot of fans. And indeed, the Trump brand can still put asses in seats. The action we saw on DWAC after that announcement is proof of that.
Make no mistake: that trading action was the result of the Trump name. It was not the result, however, of careful analysis or due diligence. If it were, it’s unlikely the stock would’ve moved at all.
Truth is, even if you think Donald Trump was the greatest president the U.S. has ever had, his track record on taking companies public is not a good one. In fact, the last time Trump took a company public, it ended up being a miserable failure for shareholders.
Dan Alexander from Forbes summed up that debacle pretty well when he wrote about Trump’s previous public company, Trump Hotels and Casino Resorts.
Check it out:
Trump Hotels and Casino Resorts started with just one Atlantic City casino, but Trump personally held another two outside of the firm. Less than a year after taking the company public, he used it to buy one of his two other casinos, the debt-burdened Taj Mahal, in a deal that valued his stake at $40.5 million. The transaction improved Trump’s personal balance sheet, but the company suddenly had a disastrous amount of debt.
As part of the agreement, Trump also collected $51 million of cash and $11 million of stock, in exchange for land that he had previously rented to the company for about 5% of that price annually. A couple of months later, Trump Hotels and Casino Resorts announced that it was going to pony up roughly another $500 million for Trump’s third Atlantic City casino. At the time, one analyst estimated that the property was worth more like $400 million, suggesting Trump was essentially robbing the public company of $100 million. Investors smelled a rotten deal, and shares plummeted 37% within days.
In 1998, Trump treated himself to two personal loans from the company, taking out $11 million in one instance and $13.5 million in another. Trump Hotels and Casino Resorts racked up an estimated $13 million of expenses. This was for things like entertaining at other Trump properties, using Trump’s personal planes and leasing space inside Trump Tower.
Trump also collected lots of fees. He had one agreement that paid him based on the performance of a particular casino. But according to the deal, Trump had to “promptly” pay back the money if things went south.
Things did go south, but Trump kept the $1.3 million. The publicly traded company eventually ended up crediting the missing funds against later earnings. In a different example, a separate Trump company collected $1.3 million as part of a “services agreement.”
According to the SEC, however, Trump’s separate company was “not required to devote any prescribed time to the performance of its duties” in order to collect the money. Such nickel-and-dime machinations added up.
From 1995 to 2004, Trump personally received an estimated $50 million in fees, salaries, rents and so forth. Over that same stretch, the company lost $647 million. In 2004, it declared bankruptcy.
His track record with private companies isn’t so hot either. Trump University, Trump Steaks, the Trump Shuttle airline. These were all huge disasters, and his social media company will be no different.
Now to be clear, the most recent action we’ve seen on Trump media stocks has been fantastic for day traders.
Trump Media and Technology Group absolutely soared after it merged with DWAC. The stock gained more than 50% on that news.
Since then, however, the stock has begun to shed the gains from that “big day.” And I predict the stock will be trading for less than $20 before the end of summer.
Understand, this is not a criticism of Trump as a presidential candidate or entrepreneur. It’s just an honest observation of an investment that isn’t worth your time or your money.
Truth is, while some folks are still chasing DJT, we’ve been making a fortune in the biotech space with a few EN-23 stocks that are riding high on FDA approvals.
I actually told you about one last month called MindMed (NASDAQ: MNMD) right before it shot to the moon.
If you’re new to Energy & Capital, here’s what I wrote…
EN-23 is a valuable class of molecules that drastically improves brain function. It’s actually one of the biggest breakthroughs medical science has seen in 50 years. Not only can it treat conditions such as depression, anxiety, PTSD and addiction, it can also help you lose weight, treat chronic pain and extend your life by up to 20 years.
I also included a link to my write-up on MindMed.
About a week later, the company announced it received breakthrough designation status from the FDA.
If you’re unfamiliar, the FDA grants breakthrough status for drugs that treat life-threatening conditions.
Here’s how the stock has performed since I first told you about it…
Make no mistake: THAT is how you get rich. Not by chasing Trump media stocks.
Now here’s the good news. While MindMed already got breakthrough status, there are a few more that are about to get it, too. And you can read about those stocks here.
You can also check out this short presentation on my top 3 EN-23 stocks to own before next week. To a new way of life and a new generation of wealth… Jeff Siegel
@JeffSiegel on Twitter
Check us out on YouTube!Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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