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Trump Media why it doesn't matter

 Trump Media is not a case of fraud it is incompetence and hubris with a gullible investing public.  These are hardly uncommon in the investment world.   The Chinese EV company is a fraud, the intent is to defraud American investors with the complicity of the Chinese state.  The intent is there from the very start, why American firms participate in these frauds is simple they get paid handsomely.  The brokers that did the Chinese EV deal got massive fees.

Trump Media is not that at all, are the managers overpaid and incompetent, yes! Is Trump suing the guys who created the platform because he wants more,Yes.  Trump wants the management team he has running the show because they are allies and supporters and for Trump, these are determinant factors.  He will always hire sycophant over competence.  It is in his DNA.

When looking at the 10-Q there is a lot of stuff that makes perfect sense, the reality is that the imbedded option where the company took a $224 million hit was baked in the cake and has no cash flow implications.   The company spent nearly $100 million dollar on new media initiatives that no one has heard about.   What these are is unclear, a new FOX News (Trump always wanted his own media platform).   Maybe a new cable company that only delivers Trump-branded programming.   Is the $100 million justified, I don't know but in one quarter of the year, Trump Media has burned 25% of its entire cash reserves.  That is significant but again not fraud, will these investments be worthwhile?  Who knows maybe the money was misspent on vanity projects but stupidity and fraud are two very different things.

No single investor will lose everything, and at the very least Trump was at one point trying to create something.  Part of the problem is that he is not good at it, and because he is surrounding himself by people who admire him rather than are competent the outcome is somewhat predictable.   Mediocre managers hardly ever produce outstanding outcomes.   

As for the performance in Q1/2024, I would have thought that the revenue stream would have come with a disclaimer that more than 50% of all revenues in the firm came from "Trump-centric products".  From what I was able to find out more than 60% of their revenues were generated by Trump's businesses.  It's like the ITV counting as revenue ads for ITV programming.   OK maybe for a very small percentage but certainly for the majority.   

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