Winning the election will determine Trump’s wealth
Donald Trump’s enterprises remain as unpredictable as ever, yet he finds himself in a more stable financial position than in recent years. In contrast to 2020, the outcome of this year’s election will carry greater consequences for the former president’s financial standing and legal circumstances. The primary distinction for Trump this time lies in his approximately $4 billion investment in Trump Media & Technology Group, which manages Truth Social, his financially underperforming social media platform. The remarkable figure is transient, inflated by fervent speculators, and stands to be obliterated should he face defeat in November.
Trump has not leveraged his ownership in the company, an asset he could have utilized to finance his campaign. Shares of Truth Social have experienced a significant surge, reflecting optimism surrounding his potential electoral victory. “Should he face defeat, I believe this venture will collapse entirely,” remarked Matthew Tuttle, chief executive of Tuttle Capital Management, who has personally invested in Trump Media. Due to the valuation of Truth Social, the enhanced performance of the Trump Organization’s portfolio of golf properties, and its robust cash reserves, Trump’s net worth has reached its highest level in years. The Wall Street Journal places the valuation between $7.5 billion and $10 billion, inclusive of debt, representing more than a twofold increase compared to figures from 2020 and 2016.
Trump’s substantial increases in the stock market have more than compensated for the declines in the worth of his real estate assets. The aggregate worth of his three most significant office properties, excluding liabilities, has diminished from approximately $1.2 billion in 2016 to around $750 million at present, as per an analysis by the Journal. The properties are experiencing one of the most severe downturns in the U.S. office market in decades. The 63-story tower at 40 Wall St., a notable asset in Trump’s portfolio, has seen its value decline from $260 million in 2016 to approximately $140 million today, excluding debt, as reported by the Journal’s analysis. Analysts suggest that the Trump Organization may face difficulties in repaying the $105 million mortgage on the building when it matures in July.
Executives from the Trump Organization have refuted claims regarding the financial jeopardy of 40 Wall, highlighting its potential for residential conversion as a mitigating factor. The company reportedly possesses ample liquidity on its balance sheet to settle the outstanding debt. The Trump Organization appears well-positioned to navigate the current real-estate downturn, having actively reduced its debt, divested assets, and accumulated cash reserves. The company postponed a variety of expansion initiatives, notably in the realms of condominiums, hotels, and resorts in international markets, following the election of Trump as president in 2016.
“We intentionally limited our number of deals,” Trump stated during a deposition last year concerning the lawsuit filed by the New York attorney general. “I sought to avoid any potential conflicts of interest…”I presumed it would not present well. Since the election of his father in 2016, Eric Trump has predominantly taken the reins of the family business. The company has adopted a more conservative approach under his leadership, despite a resurgence in foreign-licensing agreements for real-estate developments since his father’s tenure in the White House concluded.
According to Donald Trump earlier this year, it holds nearly $500 million in cash, a figure significantly higher than in prior years. Funding is derived in part from the divestiture of the Trump International Hotel in Washington, the refinancing of two office properties in which Trump has interests, and the sale of the Trump Ferry Point Golf Links in New York City. The funds may be required to address Trump’s legal challenges. He is confronting criminal charges, notably for election interference in Georgia and associated with his attempts to reverse the 2020 election results. In May, he was found guilty in a state court for manipulating records to conceal payments made to a pornographic actress.
The Trump Organization is confronted with a substantial $489 million penalty stemming from a civil-fraud case in New York. Additionally, earlier this year, a federal jury mandated that Trump pay over $83 million in damages for defaming writer E. Jean Carroll. Trump has refuted these allegations, and both costly civil judgments are currently under appeal. In the previous month, a New York appeals court scrutinized the applicability of the law in the state’s civil fraud case against Trump, raising concerns about the appropriateness of the nearly half-a-billion-dollar penalty imposed on him. Should Trump be defeated in the election, he is expected to confront the legal challenges he has managed to postpone until the conclusion of the electoral process.
One of the more favorable aspects of Trump’s portfolio is his collection of over a dozen golf courses and resorts, which collectively yield in excess of $400 million in annual revenue. The Trump Organization reported a minimum annual revenue of $730 million, as indicated in the financial disclosure submitted in August. The sport of golf had been experiencing a downturn in popularity; however, the pandemic provided an unexpected resurgence. The financial success of Trump’s courses has been bolstered by agreements to host tournaments backed by Saudi Arabia’s LIV Golf at his facilities in New Jersey, Florida, and Virginia.
The Trump Organization navigated the repercussions of the January 6, 2021, Capitol riot instigated by a pro-Trump mob with greater resilience than anticipated. Subsequently, a number of banks severed their ties with him. The PGA has abandoned its intention to host the PGA Championship at a Trump-owned course, while the refinancing of two properties in which Trump has financial interests has been suspended.
Deutsche Bank, among the limited number of prominent financial entities prepared to engage with Trump, indicated that it was improbable to extend further credit to him, while the now-defunct Signature Bank announced its decision to terminate Trump’s accounts. “The president of the United States appeared to endorse the rioters while neglecting to summon the National Guard to safeguard Congress in its constitutional responsibilities,” Signature remarked.
Regardless of the outcome, it is likely that Trump’s enterprise will endure. Considering his age of 78, it is plausible that the daily operations of the business will continue to be overseen by Eric Trump. A significant consideration will be whether it possesses the financial resources for expansion, or if a substantial portion is consumed by legal rulings and attorney expenses. Eric Trump aims to further the development of his family’s domestic properties, including Trump National Doral, the golf resort located near Miami, while also seeking to extend the Trump brand into regions such as Eastern Europe, Asia, and the Middle East. The company’s international initiatives could face delays should Trump assume the presidency once more, reminiscent of the previous administration’s impact on such endeavors. Eric Trump is contemplating expansion as he looks ahead. “We possess an unprecedented reserve of capital that our company has never encountered before,” he stated.
