Shares of Trump Media, the parent company of Truth Social, surged after its board approved an expansion into financial services and fintech with management and oversight by financial firm Charles Schwab, just over a week after President Donald Trump‘s inauguration.
Newsweek has reached out to Trump Media for comment via email on Wednesday.
Why It Matters
Trump, who took office for his second time on January 20, is indirectly a majority owner of Trump Media, and the Trump-affiliated brand’s move to expand its services from social media and streaming to financial services and cryptocurrency, is raising concerns of a potential conflict of interest.
Stock shares of Trump Media, DJT, jumped over 8 percent on Wednesday, reaching $33 per share at one point in the morning.
What To Know
In December, Donald Trump transferred 114,750,000 shares of common stock in Trump Media & Technology Group to a revocable trust, where he serves as the sole beneficiary.
The Florida-based company announced in a Wednesday press release that its new financial services division will be called Truth.Fi.
The company said its board approved the investment of up to $250 million to be managed by Charles Schwab, including “customized separately managed accounts (SMAs).” The financial firm will also be advising Truth.Fi’s investments and strategy.
Trump Media also said other financial offerings may take the form of “Customized exchange-traded funds (“ETFs”); Bitcoin and similar cryptocurrencies or crypto-related securities.”
A spokesperson for Schwab told Newsweek in an email, “As a matter of policy, we do not comment on any current or former client activities.”
In January, a granddaughter of the namesake founder of Schwab, Samantha Schwab, became a new deputy chief of staff at the U.S. Department of the Treasury.
The plunge into cryptocurrency is not new for the president, who has come to embrace the digital currency. Three days ahead of his inauguration, Trump and Melania Trump launched new cryptocurrency token, $TRUMP and $MELANIA. The president previously attacked cryptocurrency as “highly volatile and based on thin air,” but he has framed his incoming administration as pro-crypto.
According to a disclaimer on the Trump Meme website, Trump Organization-affiliated entities hold 80 percent of the cryptocurrency and will earn profits from the “trading revenue” generated through sales.
Trump Media was founded in 2021. The company says its mission is to “end Big Tech’s assault on free speech by opening up the Internet and giving people their voices back.”
In 2022, it launched its most well-known service, Truth Social, after Trump was banned on other social media platforms, notably Twitter for violating its rules moments ahead of the January 6, 2021, U.S. Capitol riot and “due to the risk of further incitement of violence.”
Trump has since been allowed back on X, formerly Twitter, but he most often posts on Truth Social. The platform prides itself on protecting free speech and having less moderation and restrictions than other mainstream platforms.
What People Are Saying
Devin Nunes, Trump Media CEO and Chairman said in the company’s press release: “Truth.Fi is a natural expansion of the Truth Social movement. We began by creating a free-speech social media platform, added an ultra-fast TV streaming service, and now we’re moving into investment products and decentralized finance. Developing American First investment vehicles is another step toward our goal of creating a robust ecosystem through which American patriots can protect themselves from the ever-present threat of cancellation, censorship, debanking, and privacy violations committed by Big Tech and woke corporations.”
Anthony Scaramucci, former Trump White House Director of Communications and co-host of The Rest Is Politics: US podcast, wrote on X on January 19: “Most dangerous thing for country about Trump coin is what comes next. Now anyone in world can essentially deposit money into bank account of President of USA with a couple clicks. Every favor—geopolitical, corporate or personal—is now on sale, right out in the open.”
David Sacks, White House AI and crypto czar and the co-founder of PayPal, said at the Crypto Ball ahead of Trump’s inauguration: “The reign of terror against crypto is over and the beginning of innovation in America for crypto has just begun.”
What Happens Next
Truth.Fi financial offerings will be rolled out this year, per the press release.
The post Invest With Trump? Truth Social Owner Soars on Partnership With Schwab appeared first on Newsweek.
