Going into business is risky. Staying in business is hard. Being successful in business takes more than just luck.
One of the most important factors required to move a business from startup to ongoing success is adequate capital. That means a business person must have plenty of money to sustain operations while the business builds sales and revenues. If it runs out of money, it runs out of time, and the business fails. This first rule of business is called DROOM — Don’t Run Out Of Money.
You’d think that someone who has entered into business as often as Donald Trump would know this rule. Or maybe he does and just doesn’t care, since he lives off a three-legged stool — his inheritance, his stiffing vendors, and the money he raises camouflaged as political support.
Trump’s most recent business venture — like his other business ventures — is tanking. Truth Social was puffed as a competitor for other successful and established social media platforms. Now Truth Social faces an uncertain future due to DROOM, concerns over Trump’s dwindling popularity, continued controversies, denial of its trademark application, huge financial losses, and a litany of stiffed vendors.
But, before you feel sorry for the vendors, you have to remember that this is not Trump’s first dance. He has been stiffing vendors for years and years, and those doing business with him should certainly know that they could well be next.
And now the future of Trump’s less than a year-old Truth Social is questionable. It is facing huge financial losses and shorting its vendors as Trump faces continued legal controversies and runs this business into the ground, as he has done with other ventures throughout his career.
A planned merger between the Trump Media & Technology Group, the business that created the Truth Social platform, and the special purpose acquisition company called Digital World Acquisition Corp., is in trouble. It turns out that the Securities and Exchange Commission is investigating Truth Social’s business dealings.
Digital World was formed to raise funds through an initial public offering but has now filed to delay its activities due to concerns about Trump’s reputation. “If President Trump becomes less popular or there are further controversies that damage his credibility or the desire of people to use a platform associated with him, and from which he will derive financial benefit, Trump Media & Technology Group’s results of operations, as well as the outcome of the proposed Business combination, could be adversely affected,” the company said in a filing with the SEC.
Digital World’s stock has plunged more than 75 percent in the last six months. Further, Fox Business Network reported that Truth Social has been accused of stiffing its web-hosting service out of $1.6 million in contractually obligated payments. Truth Social made just three payments to the web hosting service and stopped making payments in March.
Other Trump businesses have stiffed vendors before, including contractors that were left unpaid for more than $2.98 million after repairs at the Trump International Hotel. There was even a small-business owner who Trump stiffed out of $100,000 worth of pianos. Unpaid bills at the Trump Taj Mahal Casino Resort in Atlantic City amounted to $90 million. Liens were placed against Trump’s Washington, D.C., hotel as a result of $5 million in contractor bills that were left unpaid.
Trump’s companies have filed for bankruptcy at least six times. This is no exaggeration. Digital World noted this in its SEC filings. This excludes additional business failures that might not have declared bankruptcy, but closed owing vendors, employees and others.
For the record, here are some of Trump’s noteworthy business failures.
- Trump Airlines — Trump borrowed $245 million to purchase Eastern Air Shuttle. He branded it Trump Airlines. He added gold bathroom fixtures. Two years later Trump could not cover the interest payment on his loan and defaulted.
- Trump Beverages — Although Trump touted his water as “one of the purest natural spring waters bottled in the world,” it was simply bottled by a third party. Other beverages, including Trump Fire and Trump Power, seem not to have made it to market. And Trump’s American Pale Ale died with a trademark withdrawal.
- Trump Game — Milton Bradley tried to sell it. As did Hasbro. After investment, the game died and went out of circulation.
- Trump Casinos — Trump filed for bankruptcy three times on his casinos, namely the Trump Taj Mahal, the Trump Marina and the Trump Plaza in New Jersey and the Trump Casino in Indiana. Trump avoided debt obligations of $3 billion the first time. Then $1.8 billion the second time. And then after reorganizing, shuffling money and assets, and waiting four years, Trump again declared bankruptcy after missing ongoing interest payments on multi-million dollar bonds. He was finally forced to step down as chairman.
- Trump Magazine — Trump Style and Trump World were renamed Trump Magazine to reap advertising dollars from his name recognition. However, Trump Magazine also went out of business.
- Trump Mortgage — Trump told CNBC in 2006 that “I think it’s a great time to start a mortgage company. … The real-estate market is going to be very strong for a long time to come.” Then the real estate market collapsed. Trump had hired E.J. Ridings as CEO of Trump Mortgage and boasted that Ridings had been a “top executive of one of Wall Street’s most prestigious investment banks.” Turned out Ridings had only six months of experience as a stockbroker. Trump Mortgage closed and never paid a $298,274 judgment it owed a former employee, nor the $3,555 it owed in unpaid taxes.
- Trump Steaks — Trump closed Trump Steaks due to a lack of sales while owing Buckhead Beef $715,000.
- Trump’s Travel Site — GoTrump.com was in business for one year. Failed.
- Trumpnet — A telephone communication company that abandoned its trademark.
- Trump Tower Tampa — Trump sold his name to the developers and received $2 million. Then the project went belly-up with only $3,500 left in the company. Condo buyers sued Trump for allegedly misleading them. Trump settled and paid as little as $11,115 to buyers who had lost hundreds of thousands of dollars.
- Trump University or the Trump Entrepreneur Initiative — Trump staged wealth-building seminars costing up to $34,995 for mentorships that would offer students access to Trump’s secrets of success. Instructors turned out to be motivational speakers sometimes with criminal records. Lawsuits and criminal investigations abound.
- Trump Vodka — Business failed due to a lack of sales.
- Trump Fragrances — Success by Trump, Empire by Trump, and Donald Trump: The Fragrances all failed due to being discontinued, perhaps as a result of few sales.
- Trump Mattress — Serta stopped offering a Trump-branded mattress, again likely due to slacking sales.
- Truth Social — This existing Trump business owes big money, and may well be breathing its last.
We need to call it like it is.
How can anyone look to Trump for leadership, honesty or integrity when the trail he leaves behind him is littered with slime, broken promises, poor decisions, stiffed vendors, devastating reputation and history of repeated failure?
Bill Gindlesperger is a central Pennsylvanian, Dickinson College graduate, Pennsylvania System Of Higher Education (PASSHE) Governor, Shippensburg University Trustee, and Chairman of eLynxx Solutions. eLynxx software coordinates and drives communication, specifying, approval, procurement or production, reporting and activities necessary to obtaining direct mail, marketing materials, promo and all other printing. He is a board member, campaign advisor, successful entrepreneur, published author and commentator. He can be reached at [email protected].
