Who just gave Donald Trump 1 billion dollars? Let's see what happens

If the former president reclaims the White House, investments in a blank-check corporation backing him might convert into IOUs.

On Saturday, Donald Trump's new social media corporation said that the blank-check company it established to monetize the former president's digital and political clout had raised $1 billion — without naming the "diverse collection of institutional investors" who backed him.

Trump, a misinformation mastermind barred from popular social media platforms, has positioned his flimsy business, Truth Social, as a tool for combating "restriction and political discrimination" as well as "Big Tech dictatorship." It's also a simple method for Trump to keep doing what he's done throughout his life: divorcing investors and supporters from their money by peddling promises he habitually breaks.

To be sure, some investors have already profited handsomely from this ruse. When the Trump Media and Technology Group announced in October that it will employ Digital World Acquisition Corp., a special purpose acquisition company (or SPAC), to go public, the SPAC's stock soared from $9.96 to $94.20 in only two days. The stock has subsequently stabilized at $44.97, but hedge funds and others that invested early in DWAC have profited handsomely.

On the other side, Trump's single publicly listed firm, his doomed casino venture, has gone through many rounds of bankruptcy, destroying investors, banks, and employees along the way, and leaving a frightening collection of craters in Atlantic City. Trump, with the help of his father, weathered the storm, but few others did. Some red flags have already been raised by Trump Media and Truth Social. They want to open their doors in the first quarter of next year, but, as my colleague Matt Levine pointed out, they are doing so without a thorough business strategy or financial predictions. Trump Media has also yet to finalize its merger with DWAC or file the necessary securities paperwork. Moreover, SPACs have a poor track record, lagging more traditional initial public offerings. (According to DWAC, the Securities and Exchange Commission is already looking into the firm, including demanding data connected to the names of specific investors.)

So, if you're looking for a bargain, keep in mind that caveat emptor.

But there's another, more serious concern in all of this. Trump is a former President of the United States who is expected to run for President again in 2024. He has tampered with the national security system before, and he may do it again. The identity of the investors who just hurled $1 billion at Trump are of importance because anyone who can buy their way into Trump's good graces by dumping a bag of cash on his desk has the power to influence public policy, making Trump a national security concern.

What would it signify, for example, if Saudi Arabia or other Middle Eastern governments decide to invest in his venture? That isn't a completely imaginary scenario.

Former Treasury Secretary Steven Mnuchin has formed Liberty Strategic Capital, an investment business with funds from the Saudi government and other Persian Gulf governments. When Mnuchin was one of the most influential financial regulators in the Trump administration, he courted those same nations, but avoiding financial conflicts of interest was never a concern for Mnuchin, Trump, and many others on his team.

Even when proof appeared that Saudi Arabia organized the murder of writer Jamal Khashoggi, the Trump administration indulged the nation. Following the assassination, Mnuchin met with Saudi Crown Prince Mohammed Bin Salman in person. The Saudi fund that invested in Liberty Strategic Capital is headed by Bin Salman. Despite legislative resistance, Trump's White House went out of its way to push arms agreements with Saudi Arabia and the United Arab Emirates, and it openly backed both nations in their contentious operations in Yemen's civil war.

Jared Kushner, Trump's son-in-law and a former top White House advisor who was an eager ambassador to the Middle East, is also attempting to start an investment business with offices in the United States and Israel. Saudi Arabia is supposed to be interested in his new endeavor, while Qatar and the United Arab Emirates are said to have passed. Perhaps they'll return if Trump's proximity to the White House increases.

When Trump lost the presidential election in 2020, he was already struggling to pay back more than $1 billion in debt that hovered over his pandemic-damaged real estate and resort businesses. According to the Washington Post, Donald just decided to sell his valued but losing Washington hotel for $375 million, netting the Trump Organization a $100 million profit. According to the New York Times, the money will help pay off at least $421 million in debt that Trump personally guaranteed and will be due in the next several years.

As president, Trump's debts, dependency on foreign money, and reluctance to legitimately remove himself from his jumble of enterprises rendered him a national security concern. If he runs for reelection in 2024, that threat will resurface.

Meanwhile, with Trump still in need of cash, the $1 billion he recently raised through a "private investment in public equity" (or PIPE) must be welcome news to him. After all, that's a substantial increase above the $293 million raised by DWAC when it went public in September. Perhaps the $1 billion just indicates that some investors feel Truth Social will be a huge success. Maybe they're trying to purchase Trump's favor. Let's find out who they are in any case.