If you believe it, here’s some rich irony: at least two multi-billionaires who made their bread in the world of careful bets have all but admitted they failed to do an ounce of research before dropping large sums on Republican presidential candidate Ron DeSantis.
They probably wouldn’t agree with that characterization. But the only alternative explanation is what they might be trying to hide: that they’re distancing themselves so they don’t drown alongside the sinking ship that is DeSantis’ presidential campaign.
The ultrawealthy in question—hedge fund magnate Ken Griffin and online brokerage founder Thomas Peterffy—have recently sworn off playing sugar daddy for DeSantis. Peterffy said in April that he doesn’t like the Florida governor’s abortion restrictions. Griffin is no longer keen on some of his governing tactics.
What they’re really saying is that they didn’t do their homework on DeSantis, who’s embraced extremism and authoritarianism since the inception of his political career. They’re essentially claiming they bought him sight unseen. It’s a shocking admission from the one percenters, because even the vest-sporting 20-year-old interns on Wall Street know the importance of due diligence, coined for the research phase leading up to a large investment.
Whether it’s a sizable stake or the whole thing, when you buy into a company you really ought to take a hard look at it to make sure you won’t get burned. Betting on political candidates is hardly different. In either case you’re seeking a return on investment.
Griffin and Peterffy backed DeSantis for governor in 2018 and again before his 2022 re-election. Peterffy’s donated at least $550,000, a much more forgivable sum than Griffin’s combined $10 million-plus. Their donations to his re-election campaign (more of a formality than a contest) were de-facto backings for DeSantis’ presidential bid, evidenced by the millions he transferred from his state war chest to his federal PAC following re-election.
But the red flags—like DeSantis’ anti-abortion position or affinity for weaponizing government—have always been there. In business terms, putting so much money behind DeSantis only to back out later because of his politics is like purchasing Apple, Inc., and selling it after realizing the company doesn’t sell Red Delicious, Granny Smith, Honeycrisp, or other tree fruit varieties.
DeSantis hasn’t changed his position on abortion. In 2018, he promised to sign a bill banning the procedure after detection of a fetal heartbeat. That’s in line with the six-week ban DeSantis signed into law in April. Still, Peterffy acts as if the abortion law comes as a surprise to himself and reportedly Nelson Peltz, another billionaire who was crushing on DeSantis.
Peterffy has also said he doesn’t like that DeSantis bans books. Griffin’s chief qualm is the governor’s battle against Disney. Both are problems they should’ve seen coming, because DeSantis wears the badge of authoritarianism on his sleeve.
DeSantis is a product of the Freedom Caucus in Congress, about as far right as you could get in the Capitol—unless you’re storming into it. He’s also never shied away from weaponizing the government against businesses. In 2019, days after taking office, he started a state boycott against Airbnb after the short-term rental company delisted properties in the West Bank. During his 2021 State of the State Address, weeks before Griffin injected DeSantis’ re-election campaign with $5 million, the governor promised to launch an assault against “Big Tech” companies.
Yet a somehow-perplexed Griffin took to CNBC last week to suggest he was blindsided by the governor’s hard line on Disney, something he said “doesn’t reflect well on the ethos of Florida.”
“In business terms, putting so much money behind DeSantis only to back out later because of his politics is like purchasing Apple, Inc., and selling it after realizing the company doesn’t sell Red Delicious, Granny Smith, Honeycrisp, or other tree fruit varieties.”
If what they’re saying is true, these billionaires are disclosing a surprising level of oversight and lack of political acumen, especially given the fact they all have backgrounds in industries built on due diligence and smart caution.
But a maybe-more-likely reason is that they no longer want to wager on a broken horse like DeSantis.
Both Griffin and Peterffy made their departure from him public, a move that will help them curry favor with whomever emerges from the Republican field. It’s a scramble to try and save face. In billionaire terms, they’re overexposed in a stock and need to diversify. The public and noisy abandonment also acts as an invitation to the other primary candidates: the money is there for the taking.
That might be especially true with Griffin, who booked the CNBC slot just as national media started cranking out obituary equivalents for DeSantis’ campaign following a pattern of awful poll performances. Peterffy also ostensibly said the campaign’s lack of appeal was one of his reasons for jumping ship. In April he told the Financial Times that DeSantis was losing “momentum.”
But no matter how they spin it, backing DeSantis for something bigger than Florida was always a poor financial strategy. A prudent investor would’ve picked up on his fundamental flaw: his indebtedness to Trump. They then would’ve realized that DeSantis could never beat the former president because patricide isn’t a winning strategy.
The political calculus really is that simple, and it must be embarrassing for these so-called investors to have lost big by overlooking it. They’re coping by trying to put the blame on DeSantis’ strategy—as if it’s surprising to see extremism ahead of a Republican primary. It doesn’t take a billionaire to avoid buying that nonsense.
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