Levine: > Or Dan Primack writes today that “it’s not possible to even pretend that the equity value has any relation to the underlying business. At this point,

Levine: > Or Dan Primack writes today that “it’s not possible to even pretend that the equity value has any relation to the underlying business. At this point, owning TMTG is basically an in-kind donation to Donald Trump. Both financially and reputationally.” Yes! A lot of people want to associate themselves with Donald Trump, and also for some reason want to make him richer, and Trump Media’s stock is a quite straightforward way to do that. Why does it have to have any relation to the underlying business? > Back when the Trump Media special purpose acquisition company deal was first announced in 2021, the stock jumped, and I pointed out that there was not a single dollar sign in the investor presentation. I said: >I think that a more realistic valuation method here is not to worry about cash flows at all — as Trump SPAC clearly does not — and treat the stock simply as a token of public interest in Donald Trump. My guess is that the price of Trump SPAC stock will not, for instance, be much affected by its earnings announcements, unless Trump himself does the earnings calls in which case it will go up no matter what he says. … My guess is that each day that goes by without Trump news, the stock will go down a bit. My guess is that the stock is essentially a bet on Trump’s personal newsiness, on Trump-news volatility. From a different newsletter: > And the story makes the reasonable point that, if Donald Trump becomes president again and you want to bribe him, Trump Media gives you some good ways to do so: A really ambitious bidder could try to acquire the company and cash out Trump’s multi-billion dollar stake, but even short of that you could buy stock to show your support, buy advertising on Truth Social, etc. If you’re an institution, your stock ownership would be public, so Trump could see it and be grateful. There are 200m shares outstanding. The company has $300m in cash, is losing $100m a year, and a return on equity of -250%. They also have no appreciable market penetration for any of their services. In a vacuum we'd be talking about a stock that should be trading < $1. So yes, it's not completely worthless, but there is not a rational argument to be buying it at $45 a share.