President Trump’s social media company has moved one step closer to transforming itself into a financial services firm that intends to market investment products, including crypto, to retail investors.
Trump Media & Technology Group, the parent company of Truth Social, which has become Mr. Trump’s main online megaphone, said on Tuesday that it had signed a binding agreement with a crypto trading platform and a newly created Florida investment firm to launch a series of exchange-traded funds, or E.T.F.s, by the end of the year.
The move to market E.T.F.s to investors is part of a strategy by Trump Media to generate a more reliable source of revenues after failing to attract sufficient advertising dollars to Truth Social.
In the deal, Trump Media will partner with Crypto.com, a digital asset trading platform with more than 140 million customers, and Yorkville America Digital, a company with ties to the founders of Yorkville Advisors, an investment firm based in Mountainside, N.J.
Davis Polk & Wardwell, a big New York law firm, will advise the parties in developing the investment products. Over the past month, Mr. Trump has been targeting some of the nation’s biggest law firms for failing to take on conservative clients, or for taking on clients with causes the president opposes.
“This agreement is a major step forward in diversifying TMTG into financial services and digital assets,” said Devin Nunes, Trump Media’s chief executive and a former California congressman.
Yorkville America Digital was incorporated in Florida this month and is affiliated with Yorkville America and has ties to Yorkville Advisors. Yorkville America and Yorkville Advisors, which specializes in investing in small publicly traded companies, have the same principals.
Last year, Trump Media entered into an “equity line of credit” with Yorkville, an arrangement in which the firm can acquire discounted shares of the company in return for cash. To date, Yorkville has acquired a little over 17 million shares of Trump Media as part of a long-term financing arrangement, according to regulatory filings.
Any investment products sold by the companies are likely to require regulatory approval from the Securities and Exchange Commission, which is led by Paul Atkins, a business-friendly lawyer who was nominated by Mr. Trump. Republicans now hold a 3-to-1 majority on the commission.
Mr. Trump owns about 115 million shares of Trump Media, or 53 percent of the company’s stock. Shortly before returning to the White House, he transferred those shares to a trust controlled by his eldest son, Donald Jr., who is a Trump Media board member. That stake is currently worth about $2.7 billion.
Shares of Trump Media were up nearly 5 percent, to $23.59, in midday trading. The stock is down 31 percent for the year.
Matthew Goldstein is a Times reporter who covers Wall Street and white-collar crime and housing issues.
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