With the final gavel banging down Wednesday on impeachment, President Donald Trump barreled ahead in his reelection fight with a united Republican Party behind him, and emboldened by reassuring poll numbers and chaos in the Democratic race to replace him.
Republican senators voted largely in lockstep to acquit Trump, relying on a multitude of rationales for keeping him in office: He’s guilty, but his conduct wasn't impeachable; his July telephone conversation with Ukraine's president was a “perfect call”; there’s an election in 10 months and it's up to voters to determine his fate.
For Trump, there was one overriding message to draw from his acquittal: Even at a time of maximum political peril, it's his Republican Party.
In this image from video, the vote total, 52-48 for not guilty, on the first article of impeachment, abuse of power, is displayed on screen during the impeachment trial against President Donald Trump in the Senate at the U.S. Capitol in Washington, Wednesday, Feb. 5, 2020. (Senate Television via AP)
One day after Trump avoided talk of impeachment in his State of the Union address and argued that he had delivered on his 2016 campaign promises, the president already was moving to use impeachment as a 2020 rallying cry.
“He will be acquitted forever, beginning today,” White House counselor Kellyanne Conway told reporters before the vote.
The nation's first presidential nominating contest, the Iowa caucuses, handed more good news to Trump. A tabulating mishap threw the Democrats into chaos, depriving any candidate of a clear victory and allowing Trump to paint the Democrats as incompetent and corrupt.
Senate Majority Leader Mitch McConnell of Ky., walks towards the Senate floor on Capitol Hill in Washington, Wednesday, Feb. 5, 2020. (AP PhotoSusan Walsh)
Trump’s tenuous relationship with the GOP establishment has been a consistent theme of his political life in recent years, and he has repeatedly put the party's values to the test. Still, most Republicans have grudgingly stuck with him, through the revelations of the “Access Hollywood” tape, in which he was heard boasting about sexually assaulting women, and Charlottesville, where he defended white supremacists during a racial clash in the Virginia college town, as well as Helsinki, where he sided with Russia's Vladimir Putin over U.S. intelligence agencies about Moscow's 2016 election interference.
Now, they are giving him the victory he’s been waiting for and lashing their fates to his like never before.
Throughout the impeachment process, Trump drew satisfaction as Republican senators, many of whom opposed his long-shot candidacy and still dismiss him in private, overwhelmingly defended him and defied convention, tradition and public opinion polling in the process.
White House counselor Kellyanne Conway talks to reporters in the briefing room of the White House, Wednesday, Feb. 5, 2020, in Washington. (AP Photo Evan Vucci)
Scott Jennings, a longtime Republican political adviser, said the Senate impeachment trial strengthened Trump’s hand within the party, especially with his core conservative base.
“It actually endears him to his most committed supporters. If Trump is a disrupter, it makes all the sense in the world for the insiders to try to get rid of him. It hands Trump a real messaging point,” Jennings said. “I see no weaknesses in Trump now.”
While Trump is among the least popular presidents in modern history, he has nonetheless maintained wide support among Republicans, with 83% approving of his job performance in a January poll from The Associated Press-NORC Center.
Senate Minority Leader Chuck Schumer of N.Y., right, arrives on Capitol Hill, Wednesday, Feb. 5, 2020, in Washington. (AP PhotoAlex Brandon)
Taking their cues from Senate Majority Leader Mitch McConnell, with whom Trump has a respectful, if not particularly close, relationship, GOP senators fell in line to block new witnesses and documents in the trial. The final vote Wednesday was no different: O nly one Republican, Utah Sen. Mitt Romney, a longtime Trump critic, voted for removal.
Romney seemed to anticipate retribution, telling Fox News, “I have broad enough shoulders to bear the consequences."
With the impeachment trial behind him, Trump loses a reliable foil. But he will soon gain a replacement with a general election foe.
“Donald Trump is in the best political position of his presidency, in part due to his opponents’ miscalculations,” said GOP consultant Terry Sullivan. “He’s at his best when he has a clear opponent, because he’s terrible at playing defense but his political offensive game is second to none. I predict the next nine months will only get better for him as it becomes a two-person race that allows him to define it as a choice between he and his opponent.”
The president told confidants during the trial that he was impressed not just by the robust defense offered by his lawyers, but by the TV interviews offered by GOP senators outside the chamber, according to three White House aides and Republicans close to the West Wing were not authorized to discuss private conversations and spoke on condition of anonymity.
He crowed to advisers about the loyalty being shown to him and predicted the show of force bodes well for party enthusiasm in November’s election, the people said.
“I have never seen the Republican Party as Strong and as Unified as it is right now. Thank you!" Trump tweeted during the trial.
Trump has benefited from a new class of Republicans in Congress who have proved to be more partisan than their predecessors. Party members also know that Trump rains retribution on those who cross him. For all of Trump’s talk about how Democrats stick together, he’s got the Republicans in his fist.
“We've never had a president, as I said, who's as vindictive and nasty as this one and he strikes fear in the hearts of a lot of people,” Senate Minority Leader Chuck Schumer, D-N.Y., said last week.
Trump’s sky-high approval ratings within his own party acted as a deterrent that kept nearly all Republicans from breaking ranks. The fear was palpable among GOP senators worried not just about being the target of an angry tweet but about a Trump-backed primary challenger or a revolt among strong Republican supporters.
Still personally stung by impeachment, Trump is betting that he can sell his acquittal to the American people as a vindication, that he can activate his supporters and mollify even his skeptics in the center. Democrats are left with the more challenging task of explaining the details of the Ukraine case to the American people, and the White House believes Trump's less complicated message will prevail.
Follow Lemire on Twitter at http://twitter.com/@JonLemire and Miller at http://twitter.com/@zekejmiller
NEW YORK (AP) — Rooting for Donald Trump to fail has rarely been this profitable.
Just ask a hardy band of mostly amateur Wall Street investors who have collectively made tens of millions of dollars over the past month by betting that the stock price of his social media business — Truth Social — will keep dropping despite massive buying by Trump loyalists and wild swings that often mirror the candidate’s latest polls, court trials and outbursts on Trump Social itself.
Several of these investors interviewed by The Associated Press say their bearish gambles using “put” options and other trading tools are driven less by their personal feelings about the former president (most don’t like him) than their faith in the woeful underlying financials of a company that made less money last year than the average Wendy’s hamburger franchise.
“This company makes no money. ... It makes no sense," said Boise, Idaho, ad executive Elle Stange, who estimates she’s made $1,300 betting against Trump Media & Technology stock. “He's not as great a businessman as he thinks. A lot of his businesses go belly up, quickly.”
Says Seattle IT security specialist Jeff Cheung, “This is guaranteed to go to zero.”
As of Friday morning, a month since Trump Media’s initial public offering sent its stock to $66.22, it has plunged to $38.49. An AP analysis of data from research firms FactSet and S3 Partners shows that investors using puts and “short selling” have paper profits so far of at least $200 million, not including the costs of puts, which vary from trade to trade.
Still, amateur traders, mostly risking no more than a few thousand dollars each, say the stock is too volatile to declare victory yet. So they are cashing in a bit now, letting other bets ride and stealing a glance at the latest stock movements in the office cubicle, at the kitchen table or even on the toilet.
There have been plenty of scary moments, including last week when DJT, the ex-president’s initials and stock ticker, jumped nearly 40% in two days.
“I don’t know which direction the stock is going,” says Schenectady, N.Y., day trader Richard Persaud while checking his iPhone amid the surge. “It’s so unbelievably overvalued.”
Many who spoke to the AP say knowing their bets have helped slash the value of Trump’s 65% stake in half is an added political benefit. If some of their predictions are right, they may able to someday push it to zero, making it impossible for him to tap it to pay his hefty legal bills or finance his GOP presidential campaign.
They have a long way to go. Trump’s stake is still worth $4 billion.
Normally, investors betting a stock will fall, especially a gutsy breed of hedge fund traders called “short sellers,” will do plenty of homework. They’ll pore over financial statements, develop expertise in an industry, talk to competitors, and even turn to “forensic accountants” to find hidden weaknesses in the books.
No need in Trump Media’s case. It’s all there in the Sarasota, Florida-based company's 100-page financial report: A firehose of losses, $58 million last year, on minuscule revenue of $4 million from advertising and other sources.
The losses are so big, as Trump Media’s auditor wrote in the report, they “raise substantial doubt about its ability to continue as a going concern.”
A short seller’s dream? Or is it a nightmare?
Amateur trader Manny Marotta has two computer screens at home, one for work, the other showing DJT stock's movements where he can gauge how much he’s up or down.
It wasn’t looking so good earlier this week.
The legal writer from suburban Cleveland had been up about $4,000 on “put” options purchased over the past few weeks. But the screen that morning was showing investors, presumably rich ones, buying large volumes of DJT shares, pushing up the stock once again.
“My options are worth less with every passing minute,” says Marotta, adding about DJT: “It’s being manipulated. It’s insane.”
Waiting for the stock to drop is especially painful to “short sellers,” who pay a fee to borrow shares owned by others. The idea is to quickly sell them on a hunch then they will be able to buy the same number of them later for much cheaper before having to return them to the lender. That allows short sellers to pocket the difference, minus the fee, which is usually nominal.
In DJT’s case, the fee is anything but nominal.
It was costing 565% a year at one point earlier this month, meaning short sellers had only two months before any possible profits would be eaten up in fees, even if the stock went to zero. It’s a rate so off the charts, that only three other stocks in recent memory have exceeded it, according to data from Boston University’s Karl Diether and Wharton’s Itamar Drechsler, who have studied short selling back two decades.
Add in massive buying by Trump supporters who see it as a way to support their candidate, and losses could multiply fast.
“It’s scary,” says Drechsler, who likens buyers of Trump’s stock to unwavering sports fans. “It is everything that you hope that the stock market is not.”
Trump Media spokeswoman Shannon Devine said the company is in a “strong financial position” with $200 million in cash and no debt, and said the AP was “selecting admitted Trump antagonists.”
Another danger to the stock is a “short squeeze.” If the price rises sharply, it could set off a rush by short sellers who fear they’ve bet wrongly to return their borrowed shares right away and limit their losses. And so they start buying shares to replace the ones they borrowed and sold, and that very buying tends to work against them, sending the price higher, which in turn scares other short sellers, who then also buy, setting off a vicious cycle of price hikes.
“If DJT starts rallying, you’re going to see the mother of all squeezes,” says S3 Partners short-selling expert Ihor Dusaniwsky, who spent three decades at Morgan Stanley helping investors borrow shares. “This is not for the faint of heart.”
And if that wasn’t enough, there is a final oddball feature of DJT stock that could trigger an explosion in prices, up or down.
“Lock up” agreements prohibit Trump and other DJT executives from selling their shares until September. That leaves the float, or the number of shares that can be traded each day by others, at a dangerously tiny 29% of total shares that will someday flood the market. That means a big purchase or sale on any day that would barely move a typical stock can send DJT flying or crashing.
The float is smaller than that of most other notoriously volatile stocks. At their smallest levels, AMC, GameStock and Shake Shack each had more than double the float.
Seattle trader Cheung sees DJT’s freak characteristics as a reason to bet against the stock, not shy away. When the lock-up period ends, he predicts, the ex-president will indeed sell his shares, spooking the market and sending the price down sharply. And even if he doesn’t, other insiders whose lock-ups expire will fear he will do so and will move fast to get a good price before it falls.
“The first one to sell out is going make to most, ” Cheung says. “Everyone is going to sell.”
Still, he doesn’t want to lose money in the interim, so Cheung is offsetting some of his “put” bets with the purchase of “calls.” The latter are also derivatives, but they do the opposite, paying off when the stock rises. Cheung hopes that whichever makes money, the puts or the calls, he will make enough with one to more than make up for the loss of the other.
If all of this seems too complicated, there is a far simpler way to make money betting against Trump.
Offshore, casino-style betting sites are taking wagers on the 2024 election, and some have even made President Joe Biden the favorite.
Contact AP’s global investigative team at Investigative@ap.org or https://www.ap.org/tips/
Former President Donald Trump sits in a courtroom in Manhattan criminal court, before the start of his trial on Thursday, April 25, 2024, in New York. (Mark Peterson/Pool Photo via AP)
Republican presidential candidate and former President Donald Trump sits in Manhattan state court in New York, Monday, April 23, 2024. (Brendan McDermid/Pool Photo via AP)
Former President Donald Trump waits for the start of proceedings in Manhattan criminal court, Tuesday, April 23, 2024, in New York. (AP Photo/Yuki Iwamura, Pool)
