How Trump’s lucrative money-making schemes could get him out of hot water

Facing an eye-watering $454m (£360m) fine over civil fraud charges in New York, Donald Trump has a beady eye on some lucrative fundraising schemes.

The former president is tapping into his strong base of billionaire supporters at a glitzy fundraising dinner next month, while also hoping to rake in $3.4bn from the sale of his shares in the right-leaning social network Truth Social.

The Truth Social deal, which was approved on Friday, will see Trump Media & Technology Group merge with Digital World Acquisition Corporation, a special purpose acquisition company (Spac), to be listed on the stock market.

The former president would own 60 per cent of the new entity, theoretically adding billions to his net worth. His social network, founded in January 2022, offers a service not unlike X, the website formerly known as Twitter.

Users post messages known as “Truths” to their network and other users can choose to amplify these.

It’s built on the same technical framework as Twitter competitor Mastodon.

Mr Trump founded the platform roughly a year after he was removed from Facebook and Twitter, following widespread outrage over his use of social media in the lead-up to the Capitol Hill riots of 6 January 2021.

The primary difference between Twitter and Truth Social is its policies around content.

Donald Trump launched Truth Social after being removed from Twitter (Photo: Getty)

Some have put Truth Social into a bracket known as “alt tech”. This a broad category of social media platforms, including heavily right-leaning video streaming platform Rumble, now closed social network Parler, and imageboard 8Kun, formerly known as 8Chan.

But though it might be valued at more than $3bn, that doesn’t necessarily mean that Truth Social is a money making machine.

According to a financial filing, Truth Social lost $31.6m between its launch in early 2022 to mid-2023. It also made only $3.3m in advertising revenue during the first nine months of 2023.

According to the digital marketing website SimilarWeb, Truth Social gets around five million users per month versus Twitter’s six billion.

David Kemmerer, founder and CEO of cyptocurrency accountancy firm CoinLedger, said that the “crazy” valuation of Truth Social was down to three metrics, “attention, community, and speculation”, rather than traditional financial metrics such as profitability.

However, under the current terms of the deal, Mr Trump could be forced to wait up to six months to sell his shares in the new entity.

Truth Social has been compared a “meme coin” – a type of cryptocurrency which is used mainly for comedy value or rabid speculation.

A prime example is what is known as “Dogecoin”, a dog-themed Bitcoin alternative, which has been promoted by Elon Musk and has proved wildly volatile.

The former president must pay the fine issued by New York Attorney General Letitia James by Monday.

She accused Mr Trump and his family businesses of overstating his net worth by billions, in order to obtain better deals on loans.

Even if the merger deal doesn’t fix Mr Trump’s financial troubles, hedge fund billionaire John Paulson is set to hold a fundraiser for him next month, with America’s uber rich paying up $814,600 for the most expensive ticket.

Guests paying for the highest priced tickets will get a chance to sit next to Mr Trump as per the invitation, originally reported by the Financial Times.

Those only able to pay $250,000 will get the opportunity to take a photograph with the former president, as well as a personalised Trump-themed coffee table book.

Mr Paulson is worth $3.46bn, according to Forbes, and made what is one of the largest fortunes on Wall Street by betting against the US property market right before the 2008 financial crash.

It should be no particular surprise that Mr Trump’s team is looking towards the super rich – they are currently one of the main ways the Republican party gets its money.

NEW YORK - NY - MARCH 01: A Donald Trump impersonator stands outside The Trump Tower building on March 1, 2024 in New York City. A judge in New York granted a temporary pause on penalties for former U.S. President Trump after being found liable for drastically inflating the value of his assets, also allowing him to run the family company in New York. (Photo by Eduardo MunozAlvarez/VIEWpress via Getty Images)
A Donald Trump impersonator stands outside The Trump Tower building on March 1, 2024 in New York City.
(Photo: Eduardo MunozAlvarez/ Getty)

America’s billionaires contributed $881m to the US midterm elections, with these donations heavily swinging towards the Republicans, according to Americans for Tax Fairness, which used data compiled by nonpartisan campaign finance watchdog Open Secrets.

The majority – 59 per cent – of the cash flowed to Republicans, compared to 39 per cent given to Democrats.

Other billionaires who could be sitting next to Mr Trump at the event include Las Vegas’s richest Casino Mogul Steve Wynn and Linda McMahon, partner of World Wrestling Entertainment owner and billionaire Vince McMahon.

The Attorney General has made it clear she is serious about the possibility of asset seizure.

In an interview with ABC News, she said she “prepared to make sure that the judgement is paid to New Yorkers, and yes, I look at 40 Wall Street each and every day.”