Truth Social launches scheme to profit from Trump's tariff policies
A jaw-dropping conflict of interest.
The signature economic policy of President Trump's second term has been tariffs, which Trump has imposed, frozen, and revised haphazardly. On April 2, which Trump dubbed "Liberation Day," Trump imposed "reciprocal" tariffs on nearly every country, ranging from 10% to over 40%. A week later, on April 9, Trump capped tariffs for most countries at 10% for 90 days. Simultaneously, he increased tariffs on imported goods from China to 145%. On April 11, the Trump administration announced that consumer electronics would be exempt from tariffs on Chinese goods, at least temporarily.
Each of these Trumps tariff announcements had a direct and immediate impact on stock prices. The April 2 announcement of reciprocal tariffs crashed the market, with stocks losing $6.6 trillion in value over the first 48 hours. The April 9 freeze on most tariffs above 10% prompted a significant market rally, with the Dow Jones Industrial Average jumping nearly 3,000 points in one day. Stocks for companies like Apple, which import most of their consumer electronics from China, trailed the broader market until the exemption for consumer electronics was announced on April 11.
Moving forward, Trump can boost or depress the price of virtually any stock through the creation or elimination of tariffs. On Tuesday, Trump Media and Technology Group (TMTG), best known as the parent company of the social media platform Truth Social, announced it was launching a series of actively managed investment accounts. TMTG is marketing these "Truth Social-branded Separately Managed Accounts" as a way to invest in companies that benefit from Trump's political agenda. Trump remains the majority shareholder of TMTG.
In the April 15 press release, TMTG said the new investment accounts would "offer investors access to curated, thematic investment strategies rooted in American values and priorities." Among the themes are "Made in America," which presumably would focus on companies that would benefit from tariffs on competitors who make goods abroad and import them to the United States.
Jon DuPrau, Managing Partner at Index Technologies Group, which is collaborating with TMTG on the investment accounts, explicitly linked the offering to the changing political landscape. "At a time when the foundations of American prosperity are shifting, it's critical that our investment strategies reflect the values that define us," DuPrau said. "Made in America is more than just a theme — it's a declaration of support for businesses essential to our economy, national security, and enduring freedoms. These strategies empower investors to align their portfolios with patriotic and ethical convictions." According to a recent SEC filing, TMTG's investment vehicles will reflect "America First principles." Other themes include "Faith & Values," "Liberty & Security," and "Energy Independence."
Trump will profit from these accounts in two ways. First, TMTG will invest a portion of its cash reserves in accounts. Secondly, as the majority shareholder in TMTG, Trump will benefit from the fees generated by these accounts. The performance of the underlying assets held in these accounts will determine both TMTG's return on its cash reserves and interest from outside investors.
But Trump, as President, will also be able to significantly influence the performance of these assets through tariffs and other policies. It is a jaw-dropping conflict of interest for actively managed investment accounts to be marketed under the president's name through a company that is majority-owned by the president.
Why Truth Social is offering "thematic investment solutions"
Truth Social is a social media company. Why is it getting into the business of selling thematic investment accounts? One likely explanation: It is failing as a social media company.
In February, TMTG announced that during 2024, the company lost over $400 million on revenues of just $3.6 million. How many people are using Truth Social? The company refuses to reveal that information. According to the company, focusing on "key performance indicators, such as signups, average revenue per user, ad impressions and pricing, or active user accounts including monthly and daily active users, could potentially divert its focus from strategic evaluation with respect to the progress and growth of its business."
Meanwhile, Donald Trump Jr. was paid $813,000 — nearly one-quarter of the company's revenue — to be a member of TMTG's board.
Despite its bleak financials, TMTG has a market cap of over $4 billion. Most of its value is as a meme stock associated with Trump and his political prospects. Still, there are signs that Trump fans may be unable to prop up TMTG stock indefinitely. A hedge fund announced on Tuesday that it has taken a "short" position on TMTG — a $105 million bet that TMTG's stock price will decline precipitously.
TMTG also recently announced it was partnering with Crypto.com to offer funds of various cryptocurrencies. The products could benefit from Trump's ongoing deregulation of the crypto industry.
The blatant corruption of the Republican party is absolutely breathtaking.
All I can add is what Zerlina said many times on her SiriusXM radio program: "It's telling that the country voted for a convicted felon BEFORE we got a woman for President"-- paraphrasing, of course, but it's the truth, and for this American Patriot, disturbing.