Tag: Trump

SoftBank Commits $100 Billion to US Tech and Jobs Under Trump Administration

Posted on by slightbourne@noblecapitalmarkets.com
Key Points:
– SoftBank commits to a $100 billion investment in the US over the next four years, focusing on artificial intelligence and related infrastructure.
– The pledge promises the creation of 100,000 jobs in sectors like AI, semiconductors, and energy.
– The announcement follows SoftBank’s earlier ties with President Trump, marking a continuation of high-profile investment commitments to the US.

At a high-profile event in Mar-a-Lago, President-elect Donald Trump announced that SoftBank Group Corp. would commit to a $100 billion investment in the United States over the next four years. This pledge, made in partnership with SoftBank CEO Masayoshi Son, signals a strong belief in the country’s economic future, according to Trump.

During the event, Trump expressed his excitement, attributing the investment to the “confidence” that the election results instilled in Son and SoftBank. “He’s doing this because he feels very optimistic about our country since the election,” Trump said. Son echoed these sentiments, emphasizing his confidence in the US economy, stating, “I would really like to celebrate the great victory of President Trump.”

The investment plan focuses on creating 100,000 jobs, particularly in areas like artificial intelligence (AI), data centers, semiconductors, and energy infrastructure. These sectors are expected to thrive as AI technologies advance, offering substantial economic benefits while supporting the digital transformation of industries.

The announcement marks SoftBank’s most significant commitment to the US since its previous involvement during Trump’s first term. In 2016, Son pledged to create 50,000 jobs as part of a $50 billion investment, which saw SoftBank backing US companies through its Vision Fund. Despite the challenges SoftBank faced with some of its investments, such as the infamous WeWork debacle, the company is once again positioning itself as a key player in US economic growth.

Trump’s administration previously attracted major corporations to the US with promises of corporate tax cuts and deregulation. This time, he has reiterated the importance of boosting domestic investment by foreign companies, including proposals to expedite the permitting process for projects exceeding $1 billion. While it remains to be seen how these promises will unfold, they are seen as a key element in Trump’s efforts to revitalize US manufacturing and technology sectors.

However, questions linger regarding the authenticity and financial feasibility of the SoftBank pledge. While SoftBank has been raising capital for a $100 billion chip venture focused on AI, it remains unclear how much of the new investment is genuinely fresh. At the end of September, SoftBank’s cash and equivalents totaled $25 billion, leaving a gap between available resources and the pledged amount. Despite these concerns, SoftBank’s recent success with the IPO of its chip design company, Arm Holdings, valued at around $160 billion, provides a solid foundation for future investments.

Son, who recently invested $500 million in OpenAI, plans to further expand his ventures in AI, which he believes will revolutionize every industry. As for the ambitious pledge, Son jokingly responded to Trump’s challenge to increase the commitment to $200 billion, saying, “I will really try.”

In the wake of Trump’s victory, the announcement of this major investment underlines SoftBank’s continued influence in shaping the US tech landscape, as well as Son’s belief in the transformative power of AI to drive future economic growth.

Private Prison Stocks Surge Following Trump’s Immigration Appointment

Posted on by slightbourne@noblecapitalmarkets.com
Key Points:
– Shares of Geo Group and CoreCivic saw significant increases (over 7% and 8%, respectively) after the appointment of Tom Homan as “border czar,”
– Homan’s appointment aligns with Trump’s strong stance on deportation and border security, so there is an anticipated increase in federal contracts for private detention companies
– Renewed focus on immigration enforcement marks a a significant departure from the current adminstration’s stance

Private prison stocks surged Monday after President-elect Donald Trump appointed Tom Homan as “border czar,” sparking market optimism about a renewed focus on immigration enforcement. Shares of Geo Group and CoreCivic, both major players in the private detention sector, jumped over 7% and 8%, respectively, in response to the announcement. Homan, previously the head of Immigration and Customs Enforcement (ICE) under Trump’s first term, is known for his firm stance on deportation and border security. His appointment signals a potential increase in federal contracting for companies that provide detention services, specifically for ICE operations.

Trump’s announcement on Truth Social stated that Homan will be in charge of all deportation efforts, encompassing both land and maritime borders, with an emphasis on accelerating deportations. During a conservative conference in July, Homan declared he would lead the “biggest deportation force” in U.S. history if Trump was re-elected. This strong stance aligns with Trump’s previous immigration policies, which saw heightened demand for detention facilities, and is expected to bolster the private prison industry, including companies like Geo Group and CoreCivic, which have contracts with ICE and the U.S. Marshals Service.

The renewed focus on immigration enforcement under Trump is a significant shift from the current administration’s approach, which has limited federal use of private detention centers. This shift presents a potential growth opportunity for private prison companies, which struggled as President Biden worked to reduce private prison contracts. With Homan’s appointment, investors anticipate a resurgence of federal reliance on private detention services to meet increased demand for housing immigrant detainees.

Analysts have responded positively to this development, citing that Trump’s administration will likely “embrace” companies like Geo Group and CoreCivic. Isaac Boltansky, an analyst with BTIG, noted that private prison companies are positioned for growth under an immigration-focused administration, specifically due to likely contracting needs with the U.S. Marshals Service and ICE. Analysts expect Homan’s policies to generate consistent demand for private facilities, which could lead to stronger financial performance and increased market value for these companies.

Trump’s firm stance on deportation and his choice of Homan as border czar have energized investors. The expected rise in federal contracts signals a favorable outlook for private prison stocks. With immigration reform likely to be a focal point in Trump’s administration, CoreCivic and Geo Group could see sustained growth, especially as they support the expanded need for detention services. The private prison sector, long entangled with federal enforcement policies, now faces a potential resurgence as market trends align with anticipated shifts in government policy.

How the Trump vs. Harris Debate Could Impact the Stock Market

Posted on by slightbourne@noblecapitalmarkets.com
Key Points:
– Investors are watching tonight’s Trump-Harris debate closely for insights on future economic policies and potential market movements.
– Trump Media stock surged ahead of the debate, signaling possible volatility in political-adjacent companies.
– The debate could influence market sectors like tech, healthcare, and energy, depending on the candidates’ policy discussions.

As former President Donald Trump and Vice President Kamala Harris prepare to face off in tonight’s highly anticipated debate, investors and market watchers are gearing up for potential shifts in stock prices. With both candidates proposing different economic policies, the outcome of the debate could have significant consequences for the U.S. stock market. Investors are particularly interested in how the candidates will address pressing economic issues like inflation, interest rates, and taxation.

In a notable development, Trump Media stock saw a surge of over 10% ahead of the debate. The stock, which is tied to Trump’s social media company Truth Social, often acts as a gauge for Trump’s political fortunes. This sudden rise in value demonstrates how political events can trigger movements in individual stocks, particularly those closely tied to the candidates. For investors, this surge could signal increased market volatility, especially for companies that are either directly influenced by politics or considered riskier assets.

Beyond Trump Media, broader sectors of the stock market may be affected depending on how the debate unfolds. Technology stocks, which tend to react strongly to policy changes, could see immediate shifts. Major players like Amazon, Alphabet, and Meta have experienced volatility during election seasons, and tonight’s debate may reignite similar trends. Investors will be paying close attention to how both Trump and Harris propose to regulate Big Tech, particularly in areas like data privacy, AI regulation, and antitrust issues.

The healthcare and energy sectors could also experience fluctuations based on the candidates’ policy positions. Harris is expected to focus on expanding healthcare access and pushing for environmental reforms, while Trump is likely to emphasize deregulation and lower taxes. How these policies are presented could impact sectors like renewable energy, oil and gas, and healthcare providers.

From an investment standpoint, clarity in economic policy is crucial. Both Trump and Harris have been rolling out proposals in the lead-up to the debate, but tonight’s event offers a platform for more detailed discussions. Investors will be looking for any indication of how each candidate plans to handle inflation, interest rates, and fiscal stimulus—topics that directly affect market stability. As inflation continues to be a hot-button issue, any hints at future federal rate cuts or spending plans could sway market sentiment.

In particular, the debate takes place as the stock market has been navigating heightened volatility. The S&P 500 recently experienced its worst week of the year, and uncertainty around inflation and economic growth has left investors anxious. With polling showing Trump and Harris in a tight race, the outcome of the debate could introduce new dynamics into the market, particularly if one candidate clearly outshines the other in terms of their economic vision.

It’s important to note that while debates can influence market sentiment, they do not always lead to long-term market shifts. However, the candidates’ positions on fiscal policy, corporate taxes, and economic growth will be critical for long-term investors. If Trump signals a return to policies that focus on corporate tax cuts and deregulation, sectors like technology, energy, and financials could see positive momentum. On the other hand, if Harris pushes for increased regulation and green energy initiatives, renewable energy stocks may experience a rally.

Regardless of tonight’s outcome, investors should approach the market with caution in the days following the debate. Political uncertainty often leads to short-term market volatility, and traders may reposition themselves based on perceived shifts in the political landscape. However, the debate is only one factor influencing a complex global market, and long-term investors should weigh broader economic indicators before making any major decisions.

For those tracking the stock market, tonight’s debate offers more than just political theater—it’s an opportunity to gain insights into the future direction of the U.S. economy and its potential impact on market sectors. Investors should remain vigilant and keep a close eye on how both candidates articulate their economic policies, as these discussions will likely shape market expectations moving forward.

Melania’s New NFT Collection is Waking Up the NFT Marketplace

Posted on by phoffman@channelchek.com
“Proclaim Liberty” from Melania Trump’s new NFT releases ($50.00)

NFT Investments Benefit from Increased Activity

Do you remember Beeple? He’s the graphic artist who kicked off the non-fungible token (NFT) frenzy. More important than starting an NFT gold rush, the $69.3 million his piece auctioned for alerted many investors and businesspeople to other uses of tokens and blockchain technology beyond cryptocurrency. While the frenzy has simmered, the blockchain-reliant art form is still finding its place. Melania Trump, who owns an NFT company, released a freedom-themed collection in time for America’s birthday. The Ethereum based tokens will be watched closely, compared in price to previous releases, and may help rejuvenate some lost enthusiasm for NFT art.

Background

Non-fungible tokens are unique digital assets stored on a blockchain. Beyond art, NFTs can represent medical records, shipping records, music, videos, and can be adapted to most transactions that benefit from proof of something occurring. In art, the technology allows creators to monetize their digital creations and provide collectors with a method to own and invest in unique digital assets.

As with most art, value is subjective. As with any investment that is new, wild swings can be expected as a market value will be determined by the few initially involved. And these will include those that are extremely bullish and bid up prices, those that know that new thinly traded markets can be elevated by hype, and those that serve as the opposite of hype, they are openly negative on anything new or different. NFTs are no different – for example, nothing has yet openly sold for as much as Beeple’s piece.

Melania’s Place in the NFT Market

In December 2021, Melania Trump, less than one year out of the White House as First Lady, began her own NFT art provider. The themes have been beauty and patriotism and have been popular among collectors. However, since then, the prices of pieces sold and then resold have fluctuated widely in a market that has lost the world’s attention, and is far from maturity.

The Current NFT Release

Some say Melania Knavs, born in communist Slovenia, has gotten to live “the American Dream,” and can appreciate it more than most. Others say Melania Trump understands how capitalism works and is using it to make a buck off of her famous name. As it relates to NFTs, investors should probably focus most on the truth that Melania has brought attention back to this market and investors in NFTs themselves, or the blockchain technology that supports it, benefit. After all, anytime there is an increase of buyers and sellers in a marketplace, liquidity rises, and prices become more rational.

One week before USA Independence Day on July 4, the former first lady announced she is selling “The 1776 Collection,” a tranche of three thousand digital tokens priced at $50 each. Investors are asked to use their digital wallets or more traditional methods, including a credit card, to purchase digital creations.

Image: On December 16, 2021, @MELANIATRUMP tweeted this announcement.

Previous releases included the “Trump Digital Trading Cards” collection, which featured cartoonish images of the former president in unlikely scenarios, like standing on the moon. Her first edition of her collection generated more than 14,200 ETH ($26.3 million) in trading activity so far in 2023. The second edition has generated about $2.7 million over the same period.

NFT Investor’s Dream

The presence of high profile people are good for the maturation of the NFT market, and Melania Trump’s name certainly has been attached to NFT art. At the release of her third and latest collection, her June 29 announcement proclaimed it gives “collectors the ability to celebrate our nation’s independence while acknowledging America’s Founding Fathers’ vision of life, liberty, and the pursuit of happiness.” The announcement explained that “Each collectible represents an aspect of Americana and was deliberately designed to acknowledge the foundations of American ideals.”

Paul Hoffman

Managing Editor, Channelchek

What is the Espionage Act? –  A Nuts and Bolts Description

Posted on by phoffman@channelchek.com

Understanding the US Espionage Act of 1917

This month marks the 106th anniversary of the Espionage Act. Enacted on June 15, 1917, just a couple of months after the United States entered WWI. While the Act is not specifically related to stocks and other investments, discussions of the Espionage Act may, at times, overtake the news and even distract market players or potentially drive market mood. So it is best to have an accurate understanding of the components. The Espionage Act is a federal law that criminalizes spying and other activities that could be harmful to US national security. The variations and intricacies involve spying for foreign governments, leaking classified information, obstructing selective service, and using the US Postal Service to promote interests counter to those of the USA.

The Espionage Act Sections

The Act has five main sections:

Section 792: This section prohibits gathering or transmitting defense information with the intent or reason to believe that the information may be used to the injury of the United States or to the advantage of any foreign nation.

Section 793: This section prohibits gathering or transmitting classified information with the intent or reason to believe that the information may be used to the injury of the United States or to the advantage of any foreign nation.

Section 794: This section prohibits delivering defense information to a foreign government or to a person who is not entitled to receive it.

Section 795: This section prohibits photographing or sketching defense installations without permission.

Section 798: This section prohibits disclosing classified information to unauthorized persons.

The Espionage Act Uses

The Espionage Act has been used to prosecute a wide range of offenses, including leaking information, recruiting spies, and creating disobedience among military ranks.  

Espionage: Espionage is the act of spying for a foreign government. Espionage can involve gathering or transmitting classified information, or it can involve recruiting or assisting spies.

Leaking Classified Information: Leaking classified information is the act of disclosing classified information to unauthorized persons. Leaking can be done intentionally or unintentionally.

Inciting insubordination in the military: Inciting insubordination in the military is the act or behavior of encouraging military personnel to disobey orders. This can be done by spreading rumors, making false statements, or even simply providing material support to those who are planning to disobey orders.

The Espionage Act is a powerful tool that can be used to protect national security. However, the law has also been criticized for its potential to infringe on First Amendment rights. The Espionage Act has been challenged in court on several occasions, the results have been mixed, but as it applies to first amendment rights during wartime, the courts typically sidewith the state.

Espionage is the practice of spying or using spies to obtain secret or confidential information from non-disclosed sources or divulging of the same without the permission of the holder of the information. – Oxford Dictionary

Additions and Amendments

Since 1917 the Act has seen additions and addendums. These include:

Sedition Act of 1918: The Sedition Act was passed as an amendment to the Espionage Act. It criminalized various forms of expression, including any spoken or written words that aimed to incite disloyalty or contempt towards the US government, the Constitution, or the flag. First Amendment challenges, during wartime have mostly failed. The Wilson administration made it against the act to use the US Post Office for any mailing that may violate te act – 74 newspapers had been denied mailing privileges

USA Patriot Act, 2001: Following the September 11 attacks, the USA PATRIOT Act expanded the scope of the Espionage Act by enhancing surveillance and investigative powers. It broadened the definition of “national defense” and allowed for more extensive monitoring of suspected espionage activities.

Take Away

The Espionage Act of 1917 prohibited obtaining information, recording pictures, or copying descriptions of any information relating to the national defense with intent or reason to believe that the information may be used for the injury of the United States or to the advantage of any foreign nation. Since 1917 there have been a couple of new amendments to the original law.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.mtsu.edu/first-amendment/article/1045/espionage-act-of-1917

https://constitutioncenter.org/the-constitution/historic-document-library/detail/espionage-act-of-1917-and-sedition-act-of-1918-1917-1918

DWAC Trump Media Merger Deal Update

Posted on by cpatches
Source: TMTG

What We Can Learn About SPAC Investments from Trump Media/DWAC

Digital World Acquisition Corp. (DWAC), the special purpose acquisition corporation (SPAC) that agreed to merge with Trump Media (TMTG), and take it public a year ago, needs 65% shareholder approval to extend its acquisition deadline by a year. The uncertainty over whether the SPAC would get the necessary votes to merge with the social media startup caused profit taking in the SPAC which still trades at more than double its IPO price.

Reuters reported late Monday (September 5), there has not been enough votes to reach a 65% threshold of “in favor” shareholder support to extend the merger completion date by one-year. A shareholder meeting Tuesday was adjourned and will resume on Thursday (September 8) where they will take up voting again.

In a federal filing Tuesday, DWAC said that if shareholders do not approve the extension, its sponsor, ARC Global Investments, would contribute about $2.9 million to extend the deadline until Dec. 8, 2022. The purpose of the deadline is to make time for all parties to address government investigations into the deal and make other necessary disclosures. If the three-month extension doesn’t prove to be enough time, another three-month extension is possible. This won’t be necessary if the shareholder vote garners a 65% approval of the extension.

After any SPAC exhausts extension options, it is faced with a final deadline. Should it not make the deadline, it must liquidate and return cash to shareholders. Such deadlines and extensions are commonplace in the world of SPACs. Scrambling for the parties to meet deadlines is not uncommon in SPAC merger deals. What is interesting in the DWAC TMTG acquisition is there are original IPO investors that at the time did not know who Digital World would unearth as a target candidate. They paid the $10 IPO price and, within a month, saw their share price jump up more than 800%. Even today these investors are up 124%, and if the SPAC liquidated tomorrow (near $10 per share) they will have outperformed the S&P 500 by double digits.

Source: Koyfin

No matter the results, the SPAC IPO investors could consider themselves as having done better investing in the SPAC than most alternatives. But there are presumably also shareholders that bought shortly after the merger announcement that if liquidated and all the money held in escrow is returned, could lose several times their investment depending on what price they chased it to.

Shareholder voting is seldom in person and instead takes place by phone, online or via mail. Shareholders are urged to vote as reaching a 65% base of shareholders is difficult enough, reaching a 65% threshold of shareholders voting one way or another is even more difficult. Digital World Chief Executive Patrick Orlando said last week the SPAC was having trouble getting enough individuals to vote through their brokers.

The SPAC is held by a high percentage of retail accounts, this may explain the lack of voting. Failure to approve the extension will almost certainly cost current holders of DWAC money. If the deal falls through, shareholders will get roughly $10 a share, about half of the current share price.

Should the merger succeed, Digital World Acquisition would provide about $290 to the former president’s company. This could go a long way in building the brand and user base. Additionally, it is said that the two sides have investor commitments for roughly $1 billion private investment in public equity (PIPE), that would close alongside the merger.

TMTG raised about $20 million in convertible bonds last year and an additional $15 million in the first quarter of 2022. If the SPAC deal falls through there are options to keep the fledgling media company alive as a private company. On TMTG’s Truth Social on Friday, the former president responded to worries about the SPAC merger by saying, “In any event, I don’t need financing. ‘I’m really rich!’ Private company anyone?”

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.reuters.com/markets/companies/DWAC.O/

https://www.investors.com/news/dwac-stock-plunges-as-trump-merger-extension-vote-fails/

https://www.wsj.com/articles/trump-media-spac-deal-faces-new-challenge-its-own-investors-11662477258?mod=latest_headlines

https://www.dwacspac.com/