The Trump Media & Technology Group (TMTG) has made good on a rumored interest in expanding into financial services. On Wednesday, TMTG announced its board had approved the company’s expansion into financial services and fintech under a new brand, Truth.Fi, according to a press release.
The company will invest $250 million of its roughly $680 million in cash into the platform. Charles Schwab will provide custody of the money, TMTG said.
The investments will be put toward “traditional investment vehicles,” customized ETFs, and cryptocurrencies including Bitcoin, the company said. TMTG stock rose 10% Wednesday morning on the news. Truth.Fi is the latest digital asset in TMTG’s portfolio.
The company, whose majority shareholder is President Donald Trump, started with the social media platform Truth Social. Last year it expanded into video streaming, developing a free, standalone app called Truth+.
Over the last several months there were several indications that TMTG was considering a foray into fintech. There had been reports of merger talks with the fintech platform Baakt, whose former CEO Kelly Loeffler was the Republican senator from Georgia from 2020 to 2021.
Shortly after that TMTG filed a trademark application for a “digital wallet” named Truth.Fi. TMTG CEO Devin Nunes called the move a “natural expansion” for the company and the “movement” it had created.
“Developing American First investment vehicles is another step toward our goal of creating a robust ecosystem through which American patriots can protect themselves from the ever-present threat of cancellation, censorship, debanking, and privacy violations committed by Big Tech and woke corporations,” Nunes said in the press release.
Much of TMTG’s effort in building its burgeoning tech holdings have focused on creating systems it hopes will keep it insulated from being overly reliant on other vendors. For example the company has built its own content delivery network for its streaming service, rather than licensing one from a third party.
Taking Aim at Banks
The expansion into financial services comes after Trump took aim at two major American banks earlier this month. At the World Economic Forum in Davos, Switzerland, Trump chastised Bank of America CEO Brian Moynihan and JPMorgan Chase CEO Jamie Dimon for what he viewed as denying service to conservatives.
“Many conservatives complain that the banks are not allowing them to do business within the bank,” Trump said. “I hope you’re going to open your banks to conservatives because what you’re doing is wrong.”
Both Bank of America and JPMorgan Chase denied that they had refused to service customers for political reasons. Trump Media did not immediately respond to a request for comment.
Truth.Fi’s Registered Investment Adviser will be an affiliate of Yorkville Advisors, one of its existing financial partners. TMTG and Yorkville have what is called a standby equity purchase agreement.
The deal allows TMTG to sell up to $2.5 billion to Yorkville at its discretion, while Yorkville gets to buy the stock at a 97.25% discount, which it can then sell at full price on the open market.
TMTG said it plans to invest mostly in the Patriot Economy (a term used to refer to companies with conservative credentials) in sectors such as manufacturing and energy companies. The company expects Truth.Fi will be rolled out in 2025.
This article was provided by Fortune through Reuters.
