From New York Times, I'm Michael Barbaro. This is The Daily. Over the past few years, Donald Trump's social media company, Truth Social, was dismissed as a money-losing boon-dogel. Today, Matthew Goldstein on how over the past few days, it somehow became a publicly a highly traded company worth billions of dollars. It's Thursday, March 28th. Matthew, thank you for coming.Thank you for having me.Fronnie Daily.Thank you for having me.Your.

Debut.yes.do you go by Matt? I go by Matt.

You're a Matthew-byline.

Because my mother likes me using you. When I first started out, my mom says, I named you Matthew. You should use Matthew for your bio. Because I initially did use Matt, and then she got it. She caught it.

This is literally the tale of the Jewish mother.

Yes, the way all journals Journalism starts. Why did you go into journalism to begin with?

You could have been a doctor. Here we are. At least use my name. Okay. Matt, I wonder if we could start by having you tell us the current market value of this New publicly traded company, Donald Trump's social media business.

Okay, so as we sit here- 11:26 AM on Wednesday. On Wednesday. It's trading right now for around $65 a share. If you work that out, it's worth about $8 billion. That's huge. That is huge. I think it's bigger than the New York Times, actually.

I think the New York Times is around $7 billion?

It's bigger than a lot of companies, which is crazy when you think about it. Yeah.

And what is What is Donald Trump's personal stake in that? And what is that now?

Okay, so he owns 79 million shares. So roughly doing the math, and this changes, it's somewhere is around 5.6 billion. It's been going up sometimes as high as even $6 billion.

That's extraordinary.

That is extraordinary because if you believe what Forbes had said last fall, he was worth about $2.6 billion. So he's more than doubled his net worth in basically a last few days with Trump Media.

Wow. And not a moment too soon, right? Because as we've talked about on the show, Trump owes about every last cent of cash he has. I think it's an estimated 500 million or so to various courts, and this would be very auspicious timing to suddenly have an extra $5 billion in his life.

It's a critical lifeline for him right now. There, of course, there are limitations to how he can tap that money. But I think also it should not be understated, it's a huge bragging point for him, which he likes to go out and talk about being the most successful businessman on the planet. He can say, Look, I built a company that's worth $7 billion overnight. Where have you done that, Joe Biden? Or where have you done that pretty much almost anyone other than a very select, rarefied group of tech startups? Absolutely.

Tell us the story how this company, which I think a lot of people candidly dismissed from the beginning as Trump's little renegade corner of the Internet, somehow became this, a real financial behemoth in a way. What is that story?

You have to go back to January 2021. Trump is kicked off of what was then Twitter after the January sixth riots at the Capitol.

And not Twitter, right?

Facebook, Instagram. Yeah, he was kicked off everything. But Twitter was really where he had lived, as we all knew.

Right. Tens of millions of followers.

Tens of millions. So Trump is at this low point. He's out of the White House. He's down there in Mar-a-Lago. And all of a sudden, a blast from the past. He gets approached by these two guys who had been participants on his old reality show, The Apprentice. And their names are Andy Lytinski and Wes Moss. I'm no dummy.

No, I know. You know.

They're not particularly notable or famous people. I don't know if the word is stars on the show. To be perfectly I said, I want to see Mr. Trump as much as possible. Lytinsky was a really young guy. I chose to the men dominating the women. Wes Moss came us as almost like a frat boy type of character. Andy, you're fired. West, you're fired also. They weren't particularly successful, but they go to Trump.

What exactly is their pitch to him?

Their pitch is basically, Forget about Twitter. Forget about all these other platforms. Create your own platform. Create your own social media company. It'll be great. You won't be censored. You can say whatever you want. All your followers will come here. We'll make a a lot of money. It will be huge.

What was Trump's response?

Well, he's intrigued, but he never really totally commits to anything. At that point, Trump is taking a back seat on it. He's basically agreeing to lend his name, if nothing else. They sign an agreement that they're going to go out and pitch the deal. The apprentice guys know that they're going to need a lot of money to get this company off the ground, but they're not going to able to turn to traditional Wall Street sources because Trump at this point is a basic- It's got toxic. Yeah, he's a toxic guy. So the solution for the apprentice guys to raise this money was to do something called a SPAC, which is these companies that have come into vogue during the pandemic, they're basically shell companies that go public, raise hundreds of million dollars from investors, and essentially, their sole purpose is to go out and look for another company to buy. That's what they call it.

Shell companies.

Shell company, right. It's basically money in a bank account that's just sitting there to be transferred over to the private company that you buy. So for the private company that ends up merging, it's a great deal because they get Tons of cash where they had nothing the day before. The other advantage of a deal with the SPAC is that beyond the cash, the private company becomes a public company, and that gives it the ability to sell stock to investors and go out and raise more money that way. Then through that merger, eventually, the two companies coming together, the company that Trump is going to be ostensibly heading, that social media company, would get everything the SPAC had raised from investors. So all that cash is going to come flooding into the company the apprentice guys envision.

So if I'm understanding this plan correctly, the apprentice guys envision a plan where they go off, they find a SPAC that It has raised a bunch of money, and eventually it will merge with the Trump social media company they envision building. And when that marriage is consummated, their work will be over and they will hopefully have a lot of money.

Basically, I That's exactly what their goal was. The apprentice guys are out there in the market looking for a SPAC. But given the lack of really any business plan, they don't go to the top-flight guys out there. They end up at the bottom of the barrel. They end up with essentially a very no-name-sounding SPAC called Digital World Acquisition Corporation. Digital World has its IPO in September of 2021, raises $300 million Lo and behold, a month after a press release comes out late at night, Donald Trump and Trump Media are merging with Digital World Acquisition Corp. I remember people pinging me Is this a joke? Because most people, I'm sure, had never heard of Digital World. Even more people had no idea that Trump was even doing a social media company. Because while all this is going on, and they're trying to put a deal together, the social media platform that will become Truth Social hasn't even launched, and it won't do so for months later. But there's trouble right away. The Securities Exchange Commission comes in and announces it's open and investigation into how this deal came together, looking into whether digital world violated securities laws by engaging in merger talks ahead of time, which technically isn't kosher in the way SPACs are supposed to work.

But this investigation just drags on and on and on, and it's going to delay everything.

So this is turning out to be a pretty big mess.

Very big mess. It looks like this deal is never going to happen. And finally, when they launched Truth Social in early 2022, it's a little bit of a joke. It's this very early version of Twitter when it clunked clunky.

How clunky? You were on it?

Yeah, I actually think I was one of the first people to get in, which I thought was funny because I said I was from the New York Times. They actually terrified me.

Mazel tof.

There was very little traffic. It was almost like you'd post something and you could literally hear the quick. Trump never posted for three months.

Trump never posted on Truth Social, the site that exists for his-For three months.

I remember writing a story and you couldn't get an answer from them Why is he not posting?

Perhaps because he has his own doubts.

And also it wasn't a place. No one was there. I mean, they had a few million users. There's a few million dollars in advertising on Truth Social. A lot of them, the equivalent of almost late night TV advertising. Realizing that you would see. It's losing tons of money, which is in fairness, it's not unusual for a startup company to lose money. But it was not clear where it was ever going to make money and where the money was going to come in. And And we're looking at this thing, is it even going to happen? Your deal is in trouble because of regulators, and also the company is in trouble because there's just nothing there. So everyone, I think for the most part, counts this thing out. For them, it was a desperate situation. And then last summer, a bunch of things started to go right all of a sudden for Trump Media. It really started to raise the prospects that this deal actually could happen. We'll be right back.

This is A. O. Scott. I'm a critic at the New York Times. These days, there are so many movies and books and television shows and songs that it's hard to make sense of it all. At the New York Times, what the critics do is sort through as much of that as we can to come up with advice, with recommendations, to guide you toward the stuff that's worth your time and attention. But we don't only offer guidance. Critics are here to help you make sense of things, to get you thinking about the way a movie connects with history or politics, the way a song opens up emotion, how a piece of art illuminates the world in the magical way that only art can do. Really, what I do and what the other critics here do is part of the same project that all of the journalists at the New York Times work on every day to give you clarity and perspective, and above all, a deeper understanding of the world. When you subscribe to the New York Times, it's not just, Here are the headlines, but, Here What is the way everything fits together. If you'd like to subscribe, please go to nytimes.

Com/subscribe. But how is it that things start to turn around for this real mess of a social media company that Donald Trump has founded.

Okay, so the single biggest thing was last summer, the SEC settles its investigation with digital world, with the SPAC that it was merging with. And That basically at that point, clears the gates for them to start to really move forward with the merger.

What settlement was it?

They had to pay $18 million, and they had to rewrite all their disclosures to make it consistent to reveal all the early talks they had had with Trump Media. Got it. The other thing is Elon Musk buys Twitter, now X. One of the first things he does is he says, Trump, you can come back. Start posting again. We want you. We love you. Everyone thinks Trump's going to do that, but then he stays. He continues to post on Truth Social, and it's clear he's sticking with his own platform. If anything, he starts ramping up his postings on Truth Social. They become increasingly, as we know with the way Trump is, bombastic, inflammatory, attacking all the judges and all the cases going on, the prosecutors, political opponents, and he's been doing it with increasing frequency. And this is a key ingredient of last summer's turnaround, because it's clear at this point, Trump is sticking with Truth Social. He's not going anywhere. He's leaning into it, and it's become his platform. But we shouldn't lose sight that maybe the most important thing is the loyalty of shareholders. And I'm not talking about big hedge funds, big institutions, wealth healthy people.

I'm talking about ordinary Trump supporters, many of them who are posters on Truth Social and happen to be stockholders of this cash-rich SPAC that's eventually going to merge with Trump Media. They're the ones who have kept this thing going to some degree. As investors. As investors, because there were many points where the SPAC deal itself could have just failed, but they really want to make sure this company succeeds. It's almost like a religious thing for some of them. I can tell you one guy has been very vocal, is actually a Christian minister.

Good evening, D-Wack Stock.

He has his own streaming video show on Rumbel, which he called D-Wacked Live named after the shares.

Lord, we ask in the name of Jesus that you help the executives finish this strong and that you protect them from all the forces that would try to stop the merger and in their personal- Where they talk about the stock and the merger and it's got his own following.

We'll just all show up at Mar-a-Lago, knock on the door and be like, Hey, President Trump, we'd like to come party with you because we all own little bits of your company and we love you.

Let's just check on the price one more time before we head out for the night.

So in some way, Trump really owes a lot to his small shareholders who made this possible. Because if it wasn't for them, there would be no merger.

When they talk to you about why they have bought shares in this business, in this SPAC, even when it's at its least successful and most imperiled, how do they talk about why it's worth their hard-earned money?

First of all, they view their building something. They've all believe that right or wrong, whatever you may think about it, the truth social is free from censorship that allows Trump and others to say what they want. They really believe that as founding principles, they're the original owners essentially going to be of this company, and they're helping it flourish and build. So this has become a real personal thing for a lot of them, more so than I think I've ever seen with any other publicly traded company before.

So the folks who are investing in this SPAC, anticipating it will eventually get together with Truth Social, and who, as you have just said, sustain this through its darkest chapter, they aren't really there because they see this as a highly profitable business. You just said, Matt, that it was losing money. They're doing it as a statement, and I guess a measure of their fervor for Trump, for the movement he represents. Buying the stock is a way for them to put their money where their mouth is when it comes to MAGA.

Right. For them, this is about supporting Trump and supporting this company, which they view as critically important in keeping its message out there alive.

So I think that more or less brings us to this week, when this turnaround you're describing results in this crazy take off of the stock price. But just walk us through the mechanics of it.

What happened was there's the shareholder vote, and the way it works is digital world shareholders have to vote to approve the merger with Trump Media. At this point, it was a foregone conclusion, but it's a vote, so you never know what's going to happen, though. They get the vote on Friday. It's overwhelming. I think it was 29 million shares voted in favor and 200,000 voted against. I mean, you just don't see that. A landslide. A landslide, yes. Like an electoral landslide. The deal goes through. On Monday, the deal is actually closed. We have our first day of trading on Tuesday of this week. Ticker symbol, DJT. Djt.

Donald John Trump. Donald J.

Trump. Former President Donald Trump's newly merged social media company has begun trading and shares are soaring. It opens for trading at around $40 something a share. More than 6.5 million shares in Trump media had changed hands by 9:50 this morning. They have to actually halt trading briefly because the volume, the level of trading is off the charts in the stock.

And currently, you take a look at where shares are. They're up about 40%.

At one point, it reaches $70 a share.

This is the highest profile SPAC we've seen in quite a while. Really?

I'd say ever, Katie. I mean, there are- On the end of trading on Tuesday, it closes around $60. Or so. That's how we get this seven, $8 billion valuation for the company, and the paper gain of 5.6 billion.For Trump.For Trump. But for now, DJT is the mother of all meme stocks. With the stock up 32%, up as much as 58% today, hard to disagree.

I just want to make sure I understand why this company is now valued so highly. I guess what I'm really getting at is, is there an actual business case for it, given what folks in your calling would describe as the fundamentals of the business? Or is this just a measure of these Trump-supporting investors deep affinity for him. Is this basically a bubble, or is there maybe a true financial justification that can be laid out here?

Okay. If we go pure fundamentals, it's crazy. This company is not a seven or $8 billion company. It had $3.3 million in revenues for the first nine months of last year. It lost about $49 million.

Yeah, that is not the makings of an $8 billion valuation company.

No. No. I mean, the one good thing it got going, it got $300 million in cash from this merger, not for Trump, for the company. That's good. They can use that cash to go out and buy something, bring in more people, hire influencers on Truth Social. But even then, they have 10 million downloads of Truth Social. I mean, Twitter is what? Hundreds of millions of users? I'm sorry. X has 100 millions of users. Where's it going to go for that growth to justify that? But this is what Wall Street is. We call them our meme stocks. They're fantasy stocks. They take on a life of their own. We had this during the pandemic with Gamestop in AMC. The shares run up to ridiculous levels, driven largely by retail investors.

And just to remind people, those were stocks where retail investors were buying shares. It felt like because they wanted to send a message, largely anti-establishment message, they were mad at a hedge fund that had shorted it. In one case, I remember they wanted to make a point. They wanted to stick it to the man.

And also it becomes a self-fulfilling prophecy. It becomes a mania. Then others see this and get in because You feel like if you keep buying, it's never going to fall. It's never going to go down. That can work for a while, but eventually, gravity will always take hold at some part. I'm not saying that Trump media is to collapse, but at some point, something will happen that will trigger the stock to sell off. It's fragile. It's fragile, right. It's not sustainable at this level. But when it's happening, it's hard for me or anyone to give you a irrational reason. That's why there's this old thing, a rational exuberance. It's not necessarily unusual. It's just that it's unusual because you have a very loyal investor base to him personally that is driving a lot of these surges in the stock.

I'm really curious how Trump's position in this presidential campaign factors into what you just described, because it feels like this irrational exuberance has to be linked somewhat to the reality that he is the now lead candidate in the polls for re-election. But I'm curious what investors think about that, how they link his chances of becoming president with the financial health and future promise of this company.

It's definitely, I think, going to be a barometer, Trump and his political fortunes. I mean, just by way of example, the SPAC stock started to soar this year when Trump was on the verge of locking up the nomination. It was around the time DeSantis dropped out in New Hampshire. The stock surged like 60, 70% overnight. It was really because people were, Hey, Trump is going to be the nominee, and we're going to be going forward.

But can you just explain that? What does one have to do with the other?

In theory, it doesn't have anything to do with it, but it's like a proxy for him. It's also the idea that as long as Trump is still politically viable, Trump Media is viable. Truth Social is viable.

Presumably, a President 2.0 Trump is the best possible situation for this stock price.

If he wins, I think it probably will be a high watermark for the stock. I would just think, given the dynamic with the election right now, it's hard to see the stock not continuing to rise, at least until November.

Okay, I want to turn now to Trump's access to this very valuable stock at a time when, as we all know, he seems to need money. How and when could he tap into this money?

Okay, so at the moment, he actually can't. Can't? He can't. There's what's called a lockup, a restriction. It's not just for him. It's for any major shareholders. They can't sell for six months. It's actually not unusual in these kinds of circumstances. The logic is you don't want important people to the company, important shareholders to bolt as soon as the deal goes through. But there are other ways he can get around that. One way is for the board. It's a seven-member board. They're all loyalists for the most part. They could allow him to sell shares early. I personally think that's unlikely because it shows a lack of faith. Just like if he had jumped from Truth Social onto Twitter, this would be the same message being sent. Got it. What they could do is allow him to pledge those shares, meaning he can go out and get a loan, use it as collateral. The shares don't get sold, but you're giving them to some other, like a bank or probably more likely a hedge fund. So that would be a way for him to monetize his stock without actually selling it.

If Trump really wanted to, he could find a way working through this board of loyalists to tap into this money pretty quickly if he so chose to.

If he asked the board to do it, I think there's probably a good chance the board would do it. But if he doesn't really need the money that desperately, I think he probably won't. I think the board would be reluctant because it doesn't really help anyone to have lots of stock coming out into the market. That only will probably depress the price of the share.

It doesn't help to have the face of the company, the man whose initials are on the ticker, selling the stock because that suggests he doesn't have a tremendous amount of faith in the business, and that might trigger a sell-off, which would undermine the value of the rest of his stock.

It's a pretty bad cycle to start. That's the event that starts to send the sell off. And even at that point, even your most loyal shareholders may say, Well, I don't want to be left the last one holding the bag.

I want to step way back for just a minute and think about the larger meaning of what has happened with Truth Social. I mean, I've covered a lot of Trump's businesses through the years, investigated them when he was a candidate in 2016, and It really strikes me that of all the businesses he's been in, real estate, casinos, Trump University, selling Trump Steaks, Trump Wine, whatever, those made money. This in some ways feels like the least sound business of all. And yet it has made him the richest by far. That's a little bit weird to wrap your head around. What does that tell you about the nature of Trump and these investors who believe in this?

It is weird. I'm not a politics reporter, but from a business perspective, this has given me a little bit better insight into his seemingly unending popularity and support. There's the old adage on Wall Street, never fall in love with a stock. But the reality is a lot of his shareholders here are in love with the stock. They have fallen love with it, and they're in love with him to a large extent. When you have that mix there, it allows a stock to soar to unreal levels that we're seeing now. And who knows where it goes from here. But for the moment, it's clearly working for Mr. Trump.

Well, Matt, thank you very much.

Thank you for having me.

When the stock market closed on Wednesday afternoon, shares of Trump's new media company reached $66 a share, up 14% from the previous this day. As of this morning, the company is worth $9.4 billion. We'll be right back. Here's what else you need to know today. Authorities said that the six missing workers who were on the Francis Scott Key Bridge when it collapsed are now presumed dead. The workers were members of a construction crew who were repairing during masonry and potholes when a massive container ship plowed into the bridge on Tuesday morning.

This is no ordinary bridge.

This is one of the cathedrals of American infrastructure. Experts say that rebuilding the bridge, which carried 30,000 vehicles a day, will probably take years and cost hundreds of millions of dollars. A reality acknowledged by the Secretary of Transportation, Pete Butticej.

So the path to normalcy will not be easy. It will not be quick. It will not be inexpensive. But we will rebuild together.

And the first ever congestion pricing system in the United States crossed a major milestone on Wednesday when New York officially approved tolls for cars driving through the busiest sections of Manhattan. The system, modeled on those in London and Singapore, is designed to significantly reduce traffic and air pollution. The tolls, $15 for most passenger cars and as much as $36 for large trucks, are expected to raise $1 billion a year for mass transportation. The new system could still be blocked by several lawsuits seeking to derail it. But if those cases fail, the tolls will begin in mid-June. Today's episode was produced by Will Reid, Mary Wilson, and Asta Chattervedi. It was edited by Lexie D. L. Contains original music by Marion Lozano and Dan Powell, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Lansferck of Wunderly.zberg of WNDYRLE. That's it for the Daily. I'm Michael Bawara. See you tomorrow.