The MeidasTouch Podcast - Trump IN SHOCK as His Stock QUICKLY TANKS after Merger

Episode Date: March 24, 2024

MeidasTouch host Ben Meiselas reports on Donald Trump’s stocking dropping by almost 14 percent after the merger between DWAC and Trump Media was announced. Go to https://PrizePicks.com/meidas and use code meidas for a first deposit match up to $100! Visit https://meidastouch.com for more! Remember to subscribe to ALL the MeidasTouch Network Podcasts: MeidasTouch: https://www.meidastouch.com/tag/meidastouch-podcast Legal AF: https://www.meidastouch.com/tag/legal-af The PoliticsGirl Podcast: https://www.meidastouch.com/tag/the-politicsgirl-podcast The Influence Continuum: https://www.meidastouch.com/tag/the-influence-continuum-with-dr-steven-hassan Mea Culpa with Michael Cohen: https://www.meidastouch.com/tag/mea-culpa-with-michael-cohen The Weekend Show: https://www.meidastouch.com/tag/the-weekend-show Burn the Boats: https://www.meidastouch.com/tag/burn-the-boats Majority 54: https://www.meidastouch.com/tag/majority-54 Political Beatdown: https://www.meidastouch.com/tag/political-beatdown Lights On with Jessica Denson: https://www.meidastouch.com/tag/lights-on-with-jessica-denson On Democracy with FP Wellman: https://www.meidastouch.com/tag/on-democracy-with-fpwellman Uncovered: https://www.meidastouch.com/tag/maga-uncovered Learn more about your ad choices. Visit megaphone.fm/adchoices

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opinion, still very overinflated. So why, if this merger was approved, did the stock take this nose dive on Friday? What is happening here? I'm sure you've heard about this public corporation and how does this SPAC and what's going on here on Wall Street with Donald Trump, and I'm sure you've heard he's got access to potential capital now as a result of this, which I don't really think is really correct. How does this relate to all of the lawsuits? Let's break this down together, shall we? So just first off, what's a SPAC? A SPAC is a special purpose acquisition company. It's often referred to as a blank check company, and it's basically a way to bring private companies public. That's another route to doing

that as opposed to an IPO. IPOs have a lot of strict rules and regulations and kind of a way around all of those regulations from an IPO was a way to go public through a SPAC. But because so many companies that went public via the SPAC route have had disastrous endings and have gone bankrupt and have screwed shareholders over, pursuing these SPACs is nowhere near as popular as it once was. In fact, if you talk about SPACs on Wall Street, they're generally viewed with having a very, very bad reputation because how they've screwed over shareholders over and over again. Not always, but by and large. So what happened was, is that this digital world acquisition company,

this SPAC, searched to find a private company, but we now learned that there were conversations that likely took place before the SPAC was announced, which was improper. But they said, we're trying to find, the SPAC said, we're trying to find a company that's doing about $500 million to, or that's valued at $500 million to $2 billion. And they said, aha, we found one. It's Trump Media. But wait a minute. Like if you look at Trump Media's revenue,

I mean, you're talking about like low seven figure quarterly revenue. We're talking about something that's not profitable. For you to be a $2 billion company and meet the definition that was set forth here in Digital World Acquisition Company to have this merger, you would need to have somewhere on the low end, in my view, of about $50 million, not in revenue, but something called EBITDA or $50 million in kind of profits. I mean, EBITDA is earnings before interest, depreciation, taxes, and amortization. It's another way of looking at ultimately the value of a company. And normally companies trade at some value, some multiple of EBITDA.

And so if you factored in even a $ 50 or $100 million EBITDA company, and you said maybe a 10 times multiple, and it was 50 million or 100 million, that wouldn't even get you to like a billion dollars. So you got to be 100, 200 million dollar a year EBITDA company to even be valued at what the SPAC said. So that was like one of the big red flags. So why though, after going through this process and this merger being approved and a merger gets voted on by shareholders, wouldn't you think this stock would all of a sudden skyrocket?

Well, why is it going down? Because in my opinion and many others who study the markets and who are familiar with SPACs, and I've studied SPAC markets and who are familiar with SPACs. And I've studied SPACs. I've worked with SPACs before. That's where this knowledge is coming from. Now that this is going to be a real thing, this meme stock has to also kind of come up with, it comes against the forces of what the market is actually going to be seeing about this. So if you're looking at a company that's doing low seven figures in quarterly revenue, just say for a hypothetical here, and is not making a profit,

if the market is valuing this thing at $37 a share now with the drop or a market cap of $1.37 billion. In essence, it would be trading at like 1000X or 1500X revenue, not even EBITDA. I mean, and if you're, it's not even dubious. I mean, if you're SPART money, you'd be like, okay, that's just the craziest thing ever. In my opinion, I'd be like, that's just such a wild and dangerous investment. Again, this is what my opinion is here. So I think now that you have this actual merger taking place, you know, in a formal sense, so that next week it gets listed on the stock market. It will no longer be called DWAC.

When it merges, it now becomes called DJT. And so there's kind of this fool's paradigm, it's called, with meme stocks, where one person thinks that they can out-fool the next. And then you have this combination of short sellers and short squeezes and all of these people who are buying these shares who are not valuing it consistent with what the revenue is and what the profit is and what the EBITDA is, but based on can we kind of screw each other over as part of this meme stock thing. Ultimately, but based on, can we kind of screw each other over as part of this meme stock thing? Ultimately, at some point, the rubber meets the road

and then the floor kind of opens up and then there's real significant issues. Prize picks is the most fun. I've had winning up to 25 times my money this football season, and now I can play during basketball season too. You just select two or more players pick more or less on their projected stats and place your entry with

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I think that it's just a disaster waiting to happen. And the issue becomes, to me, in my opinion, not if, but when these investors are all going to get screwed. And with so much of this based on Trump himself, just think about that if Trump were to sell or divest or to not be affiliated with this thing anymore, what that does also to the overall value of the stock and how that can then impact retail investors. Now, there's currently a six-month lockup period on Donald Trump and the other executives where they can't sell their stock.

So when the stock went down about 14% on Friday, that impacted the value of Donald Trump's shares pro rata, concomitantly. So Trump shares would have the value of his holdings, his holdings on paper, dropping 14% as well. So in about six months, Trump can access this. Now, Trump can technically, like all of these executives, can request a board resolution that approves him to dispense with the stock right away. But if Trump were to do that, if he were to request board approval, which you have

to do, it's a publicly traded company, so you have to follow the rules of the SEC and NASDAQ, that would have to be submitted on an 8K that would be made in a public filing that Trump wants to dump his shares. And the moment he did that, in my opinion, boom, that would crater or crash the stock even more when people saw that was his intent. And so my view is you've got all these people kind of, some people holding on, thinking that it could go higher as a meme stock. Others saying, all right, we've inflated this stock price up significantly during the kind of pre-merger phase. Let's get out right now before it's too late. But to me, ultimately, it becomes when is that, not if, to me, it just becomes when is that going to happen and how is Donald Trump or how can he, you know, try to access this capital without letting the floor just open up and

this stock ultimately, you know, crash. You know, if the banks and smart money viewed this, viewed Truth Social and Trump media as having the value that it's currently being priced at, even with, you know, I think the significant decline in the value on Friday, Trump would be easily able to borrow against it the same way that Elon Musk borrowed against his Tesla shares in order to do the acquisition of Twitter. But there's a big difference between Twitter, which has real revenue and real metrics, and Trump media, which based on what I saw in the data, there are less people who are on Trump media, or at least it's close, in an entire month on Truth Social than the amount of people who are on Trump media, or at least it's close, in an entire month on Truth Social than

the amount of people who watch the Midas Touch YouTube channel in a 48-hour period. So more people here watching this in 48 hours than watching or going on Truth Social, I think, in like a 30-day period, I believe, you know, or it's at least kind of very close. So just think about it from that perspective as well. So now the question ultimately is, this could be almost frustrating Trump even worse than if this deal didn't go through because he sees there a paper profit or a paper on paper, all this money being, you know, all this money that exists on paper, you know, you know, billion, more than a billion dollars, but he can't access that capital.

And the question ultimately is, is, are we going to see this thing like it did on Friday? Tank, tank, tank, tank, tank. But as it relates to the New York attorney general civil fraud case, as it relates to his ability to access this thing in the next six months, I think it's going to be nearly impossible for him to do that. And I think when he tries, you have to file with the, you have to file an 8K, you have to let the market know. And then I just think that other investors are going to see that and they're going to go like, oh, we got to get out.

And then I think it's going to tank. So look, I could be wrong here. I'm not right about all of my opinions. And from the outset, I've been saying, look, there's no way that this becomes a successful thing. I still am very confident in that. I think it's actually the worst case scenario now from the perspective of retail investors who are going to get extra screwed as a result of the way this is ultimately playing out. But if you're worried, like, is Trump going to be able to access this? Even if he can force the board vote on it, which he could, I think that triggers the stock to drop significantly the moment that's announced that he's doing that. So that's going to keep that

in check. I don't think banks are going to loan against it because as I mentioned, they're going to do the analysis that I did. They're going to say, wait a minute, you have low seven figure revenue, no profit, and you're valuing this at this. We ain't holding on to this stock as collateral. These securities aren't, we don't think are worth or having any long-term value. So I don't think they're going to loan against it. That would be very dumb money that would do that. And if you look at the shareholders here, I think you have this kind of fool's game theory of going on right now. But look, we'll see. We'll keep you posted every step of the way. But a disastrous Friday for a digital world acquisition company. We'll keep you posted on more updates as we learn more,

but tell me what you think in the comments. Have a good one. Hey, Midas Mighty, love this report? Continue the conversation by following us on Instagram, at Midas Touch, to keep up with the most important news of the day. What are you waiting for? Follow us now.