This week new this Acquisition of the digital world (NASDAQ: DWAC) merged with Trump Media & Technology Group caught many people by surprise – not the least of which followed former president donald trump ups and downs in the private sector.
The idea of having Trump Media & Technology Group on the Nasdaq is particularly intriguing considering Trump’s sole attempt to run a publicly traded company.
What happened: On June 7, 1995, the real estate mogul Trump Hotels & Casino Resorts raised $ 140 million in an initial public offering. When planning his Initial Public Offering, the company assured investors that they would benefit from “the wide recognition of the ‘Trump’ name and its association with high-quality amenities and first-class service.
The fact that the company filed for bankruptcy three years earlier was not highlighted during the IPO push.
Trump Hotels & Casino Resorts served as the holding company that owned the Trump Plaza Hotel and Casino in Atlantic City, New Jersey, with plans to add more Trump-branded properties. The company was listed on the New York Stock Exchange under Trump’s initials, DJT, and traded at $ 14 per share.
Initially, the company was well received on Wall Street – a strong economy in the mid-1990s coupled with a favorable public image that Trump cultivated gave investors confidence. Stocks peaked at $ 35 in 1996, and Trump returned to the Forbes list of the 400 richest people for the first time in seven years.
Unfortunately for its shareholders, the euphoria was fleeting. In 1996, the company bought a pair of financially troubled Atlantic City casinos, the Trump Taj Mahal and Trump Castle, which placed the publicly traded company over $ 1 billion in debt.
During the year, the stock price fell to $ 12. Within nine years of his Initial Public Offering, Trump Hotels & Casino Resorts lost $ 637 million. The company declared bankruptcy in 2004 with debt of $ 1.8 billion. The NYSE froze trading and subsequently delisted the company.
Trump Hotels & Casino Resorts was reorganized in Trump entertainment resorts and moved to Nasdaq in 2005 under the ticker TRMP. But history repeated itself: Its Nasdaq debut mirrored its NYSE debut opening at $ 14 and stock prices initially rose, only to collapse as the company was forced to file another bankruptcy that listed $ 2.06 billion in assets and over $ 1.74 billion in liabilities. The Nasdaq delisted TRMP in February 2009 when its shares were trading at pennies per share.
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Why it happened: Much of the blame for Trump’s failure to lead a publicly traded company has been blamed solely on Trump’s desk. He was accused of making substantial profits while his business failed – he pocketed a salary of $ 1.5 million when the company filed for bankruptcy in 2004 – and he never really adjusted to the structure of a listed entity, freely admitting that he was not comfortable responding to his board of directors.
He also sent bizarre messages to the investment community that seemed out of touch with reality, especially after the 2004 bankruptcy, when he told a reporter: “I don’t think this is a failure. It is a success. The future looks very bright.
With the 2009 bankruptcy, Trump resigned from the company. His daughter Ivanka, whom he appointed to the board two years earlier, also resigned. Trump insisted he had other activities that required his attention.
“The business was for a time significantly less than 1% of my net worth, and my investment in it isn’t worth anything to me now,” he said.
The company dribbled without Trump’s presence until 2014, when it again declared bankruptcy; the Trump Plaza hotel closed that year. The company emerged from bankruptcy in February 2016 with Carl Icahn like its owner.
Photo: Gage Skidmore / Flickr Creative Commons.
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