How much will Trumps net worth increase if he returns to the White House?

Original author: Tom Maloney, Bloomberg

Traduction originale : Luffy, Foresight News

Hours before polls closed on Election Day in the United States, Donald Trumps social media company released a bleak financial update: in the first nine months of 2024, the company had sales of just $2.6 million and an operating loss of $363 million.

But less than 12 hours later, as it became clear that the former president would return to the White House in a landslide, the companys stock price soared 60%, instantly increasing Trumps personal paper wealth by $2.4 billion.

Marchés are always predicting who will take power in Washington. But if you want to assess the worth of the U.S. president, there’s no clearer way than to look at Trump’s personal wealth, which the Bloomberg Billionaires Index estimates is about $6.7 billion.

Trumps victory will consolidate his business empire spanning media, real estate and cryptocurrency, an empire that relies heavily on his image, brand and, most importantly, his political power. Add to that the fact that Trump is now able to defuse multiple legal disputes that threaten his business and his freedom, and the prospects for many of his investments have never been brighter.

One of the many benefits of being president is that this position of authority is likely to provide a huge advantage in difficult negotiations over some of Trump’s real estate assets. Real estate experts say that because of Trump’s central position in Republican politics, the value of his Palm Beach club, Mar-a-Lago, has become higher. Not to mention that investors, both American and foreign, will seek to work with him to gain some connection to the White House.

“Maybe he’ll be worth $100 billion. I don’t know, he’ll figure it out, he really will figure it out,” said Louise Sunshine, a former executive vice president at the Trump Organization, which helped develop Trump Tower. “He’ll be richer and more powerful than ever.”

Donald Trump arrives at the Palm Beach Convention Center for an election night party

Shares of Trump Media Technology Group (ticker: DJT) experienced a brief rally on Wednesday, ultimately rising 5.8%.

But experts say regaining the presidency means the 78-year-old Trump is just beginning to reap the financial rewards of his extraordinary political comeback. Eric Trump, executive vice president of the Trump Organization and Donald Trumps second son, did not respond to requests for comment.

Trump Media Technology Group

The most obvious increase in Trump’s wealth came from Trump Media Technology, his largest asset on Election Day, valued at $3.9 billion. The company’s stock has long traded independently of fundamentals, acting more like a betting market on Trump’s return to the White House.

Whether the company can maintain its nearly $8 billion market cap remains an open question. On Tuesday, Trump Media Technology reported a $19 million loss on $1 million in revenue in the third quarter, suggesting that even in the middle of an election season, there is little demand for advertising on the Truth Social platform.

A Donald Trump logo hangs on the Moonshot booth during the 2024 Bitcoin Conference in Nashville. Image credit: Bloomberg

There has been occasional unconfirmed speculation that Elon Musk, Trump’s most prominent billionaire backer, might merge Truth Social with Site X. Neither party has acknowledged such rumors, but Truth Social said this week that it “will continue to explore other growth possibilities, such as potential mergers and acquisitions.”

Trump has had his fair share of failures in his business career. He tried to capitalize on the popularity of The Apprentice by putting his name on Trump Water, Trump Vodka, Trump Perfume, Trump Steaks, and most of them failed. He still has some failures to this day, like a Trump-endorsed Bible, from which he made $300,000.

But cryptocurrencies have opened up a new, lucrative avenue for marketing the Trump brand.

Cryptocurrency Venture Capital

According to an August disclosure document from Trump, his NFT collection (digital commerce cards that show him in various poses and outfits, which cost $99 each) has brought in a total of $7.2 million.

Arca portfolio manager Sasha Fleyshman said: While Trumps victory will have indirect effects on collections associated with him, these effects are mostly based on nostalgia and do not have a strong correlation with the election in the long run.

Cards featuring Donald Trump and Silk Road founder Ross Ulbricht were on sale at the Bitcoin 2024 conference in Nashville. Image credit: Bloomberg

World Liberty Financial, a Trump family-run project, has sold millions of dollars worth of tokens to fund a yet-to-be-created cryptocurrency lending platform. Trump has embraced cryptocurrencies and pledged certain support for the industry, such as firing U.S. Securities and Échange Commission Chairman Gary Gensler.

Mar-a-Lago

As for Mar-a-Lago, where Trumps election polling party was held, it has always been a prime location; but as the winter White House of the US President, its value has risen to another level.

Trump spent a lot of time there during his first term, planning several major operations, such as the assassination of a top Iranian general. It was a must-stop for business executives, lobbyists and foreign emissaries who wanted access to Trump. Even after Trump lost the 2020 election, it remained central to his image.

Mar-a-Lago in Palm Beach, Florida. Photo credit: Getty Images

According to his latest ethics disclosure, the Bloomberg Billionaires Index values Mar-a-Lago at $250 million, and he earned $56 million in the 16 months from January 2023 to date, compared with $21 million in 2021.

Trumps club manager told Bloomberg in June that starting in October, new membership fees at Mar-a-Lago had risen from $700,000 to $1 million. Before Trump won in 2016, membership fees at Mar-a-Lago were $100,000.

immobilier

Trumps New York properties will also benefit from his new presidency, one of which is a commercial office building at 40 Wall Street in downtown Manhattan.

The office building had an occupancy rate of 74% in June, down from 98% in 2015, when the company issued a $160 million loan. Office buildings have been hit by the spread of remote work and high interest rates in the wake of the coronavirus pandemic, with downtown Manhattan one of the hardest-hit areas in New York. The 1920s Art Deco building earned just enough in June to cover 62% of its debt costs, according to the latest loan review.

Trump Tower at 40 Wall Street in New Yorks financial district. Image source: Bloomberg

Ruth Colp-Haber, CEO of Wharton Property Advisors, said that under a Trump presidency, any aggressive action by lenders or lessors would be difficult to implement for obvious reasons.

Even Trump Tower itself is a concern. The Trump Organization extended its lease with Gucci in 2020 in exchange for rent relief. But in January, Gucci parent Kering acquired 715-717 Fifth Avenue across the street for $963 million. If the luxury brand moves away, Trump’s most iconic Manhattan building will be without its main retail tenant. The risk of that happening is greater now than when he was a private citizen.

“Being president means having a lot of influence,” Colp-Haber said.

Foreign Investment

This influence extends beyond the borders of the United States.

During Trump’s first term, he placed his businesses in trusts and handed control to his two sons to prevent potential conflicts of interest. In October, Eric Trump suggested to The New York Times that restrictions on the business might be weakened this time around.

Donald Trump plays golf at Trump National Doral Golf Club in Miami on October 27, 2022. Photo credit: AFP

We did everything we could to avoid any appearance of impropriety in our first term, but frankly, we were defeated, he said.

Since 2020, the Trump Organization has expanded its overseas investments, which would benefit greatly if Trump stays in the White House for another four years. This year alone, the group has announced partnerships with Vietnam to develop golf courses and hotels and residential towers in Saudi Arabia, and his financial disclosures list millions of dollars in revenue from India, Oman and Dubai. Closer to home, the Trump Doral resort in Florida, one of his three golf properties and one of his most valuable assets, has hosted the Saudi-backed LIV Golf League.

Legal challenges

One area that is difficult to quantify in monetary terms is the ability of a U.S. president to avoid legal challenges.

Trump will have ultimate authority over the U.S. Justice Department, and a sitting president cannot be prosecuted while in office. He will have the power to dismiss or at least indéfinitely delay his criminal cases, avoiding the threat of years in prison, and can order his attorney general to drop two federal indictments that accuse him of trying to overturn the results of his 2020 election defeat and improperly handling classified information.

Trumps motorcade after a New York jury found him guilty of multiple felonies following his trial over hush money payments. Image credit: Bloomberg

Trump will no longer have the same authority over his criminal cases in state courts, including the so-called hush-money case in which he was convicted of 34 felonies in May. But he still has strong constitutional grounds to have those convictions thrown out, meaning his sentencing scheduled for Nov. 26 in New York is unlikely.

“I think power is more attractive to him now than money,” said Sunshine, a former Trump Organization executive. “Sometimes, power is more important than money.”

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