On Wednesday evening, Donald Trump’s get-around-the-ban surrogate on Twitter, Liz Harrington, issued a statement announcing the formation of the “Trump Media and Technology Group” (TMTG). Most of the attention focused on this missive has been centered around the announcement of something called “TRUTH Social”—also known as yet-another-Trump-focused-Twitter-clone. But that’s not the real point of TMTG. The real point is that this is a scheme through which Trump can collect several hundred million dollars, even if his new social platform never posts a tweet, or a toot, or a fart, or whatever they end up being called.

The truth behind TRUTH Social is right there in the first paragraph of the announcement, which is not focused on the technology behind the platform, or anything that Trump is bringing to the table. Instead, that paragraph is dedicated to explaining how the project has been given “an initial enterprise value of $875 million” and “a cumulative valuation up to $1.7 billion.” Which is amazing, because what it seems to have is nothing more than a credit line and some highly generic code that was hacked within minutes of the beta address becoming known.

No sooner had the first test invites been handed out than someone spoofed Trump’s account and posted, well, as Daily Beast contributor Steven Monacelli accurately puts it, “a photo of a pig defecating on its own scrotum.” Two hours after it first went up, the whole site came down.

However, it doesn’t matter if the site ever sticks its head above the waste pool again. Because that’s not the point. Donald Trump is potentially walking about with $340 million, even if it fails completely. That’s the point.

What Trump is attempting here is something called a SPAC, or Special Purpose Acquisition Companies. It’s also known as a “reverse merger” or a “blank check company.” It’s a scheme in which some low-value shell company that’s already listed on a stock market “buys” a private company, then relists itself under the name of that new company. In almost all cases, what’s really going on is that the private company is just taking over the empty husk of that shell company—a company that may have existed for no other purpose than to serve as a placeholder for some future SPAC.

Why go through these steps? Because getting listed on a stock exchange generally requires clearing a number of hurdles, including meeting requirements from the Securities and Exchange Commission. SPACS can just pop into existence, taking a fast track to a stock listing while dodging almost every qualifying step. 

The whole idea of the SPAC is relatively new, and in the last year they’ve really taken off. In some cases, these schemes have allowed start ups to jump immediately to market, capitalizing on interest in new technology or rising industries. Among others, several small electric car companies made a sudden appearance on NASDAQ last year after taking over the corpses of fading corporations.

But there’s one particular kind of SPAC that’s described in this article from Mergers and Acquisitions. A kind known as the “celebrity SPAC.” 

That’s exactly what’s happening with TMTG. Teenage Mutant Turtle Gropers—sorry, that’s Trump Media and Technology Group—doesn’t have to rival Twitter. It doesn’t even have to threaten whatever “conservative social media platforms” are still limping along out there. It just has to collect investors. Because this:

Remember the numbers on how this was being “valued” in Trump’s announcement? That’s right. This is an attempt by Trump to scam between $175 million and $340 million with essentially no investment and no effort. As the article explains, the “sponsor” can walk away with a bundle, “even if the SPAC performs horribly and the share price plummets, while normal investors will lose everything.”

Trump already has a good idea how this works, because, as CNBC noted in 2020, former Trump adviser Gary Cohn put together a SPAC worth a potential $600 million (and $120 million directly to Cohn) when it formed a “blank check” holding company whose entire purpose seems to be simply to get people to buy into shares. A SPAC of this variety is nothing more than a exchange-based Ponzi scheme in which the original Ponzi is guaranteed to walk away with a mountain of cash.

TMTG isn’t a social media platform. It’s a scam. Trump does need another social media platform. He needs suckers willing to buy stock. And Trump has always been very, very good at locating suckers.

So while it’s fun to point out that TRUTH Social has some of the most restrictive rules of any platform, including rules that prohibit criticizing TRUTH Social, it doesn’t really matter. The whole platform can be sh#t pigs all the way down. It can collapse under its own incompetence. None of that means a thing. What matters to Trump is that he gets to walk away with a bundle.

Not every SPAC is a scam. They really can be a means of quickly connecting investors to rising companies that aren’t yet at a stage that would allow them to get onto the exchange through more traditional means. But of the $82 billion raised through SPACS in 2020, a large amount is either super speculative investment or an outright scam. Which lead the Harvard Business Review to note last February that the SPAC bubble was looking very fragile. Once it became clear that this was a way to drub investors for ready cash, everyone wanted in.

Trump isn’t being innovative in his technology. He’s not even being innovative in his scam. In a lot of ways, he’s late to the SPAC party. But it’s way past time for the SEC to put some serious restrictions on these backdoor listing schemes and blank check companies.