David Warsh: Trump keeps grifting; what next for Bloomberg?
Bloomberg’s headquarters tower on Lexington Avenue in Midtown Manhattan
SOMERVILLE, Mass.
Donald Trump is planning to start a social-media network to compete with Twitter and Facebook, which have kicked him off their platforms. Digital World Acquisition Co. (DWAC), a so-called blank-check company, or SPAC, plans to fund Truth Social, Trump’s venture, with the $290 million that the company has raised from institutional investors, merging itself out of existence in the process. DWAC shares closed Friday at $94, a ten-fold increase over their initial offering price a few days before, having traded as high as $175 during the day. Trump’s alternative to Twitter is scheduled to launch next month.
But Truth Social seems unlikely to succeed.
Whatever the case, investors in what by then will be listed as Trump Media & Technology Group will be able to continue trading with each other, after the DWAC evanesces. The Wall Street Journal on Oct. 23 explained the road ahead. Bloomberg Opinion columnist Matt Levine commented, “If you are in the business of raising money to fund a social media company that you haven’t built yet and perhaps never will, the SPAC format has a real appeal.” In other words, Trump Social is another example of pure Trump fleece.
Meanwhile, there is Bloomberg L.P., almost the polar opposite of what Trump intends.
By now the Bloomberg story is well known, thanks to Eleanor Randolph’s excellent 2019 biography: how the 38-year-old Salomon Brothers partner was first banished to the computer room, then squeezed out of the firm altogether after a merger, only to surface two years later, aided by MerrillLynch (which still owns 12 percent of the company), with a proprietary bond-price data base and a package of related computer analytics, a system he first called Market Master.
Bloomberg terminal-subscription growth (at $24,000 a year apiece!) was so explosive in the ‘80s that, by 1990, Bloomberg was able to start a news service, hiring Matthew Winkler, the WSJ reporter who had covered his rise, as its first editor-in-chief. Bundled with Bloomberg analytics, Bloomberg News grew by leaps and bounds as well, until it rivaled powerhouse Reuters, the world’s oldest and largest news agency. John Micklethwait, editor of The Economist, replaced Winkler and continued to build its staff, hiring newspaper veterans and various media stars, But Bloomberg News’s product remains almost entirely online, which limits its influence in some critical dimensions. I read it there; it is not the same as print.
True, there is Bloomberg Businessweek. Bloomberg bought the time-honored title from McGraw-Hill in 2009, at a fire-sale price, inserted his name, and gave it a complete makeover. The magazine arrives via postal mail, one day or another each week, and often many more days go by before I open its cover. When I do, I am always impressed by its contents, especially the decent, moderate Republican tone of its editorials, in sharp contrast to the over-the-top WSJ editorial page. But there is something about the weekly magazine format that no longer works, at least for those lacking leisure. The Economist fares only a little bit better at my breakfast table.
Bloomberg, 79, was elected three time mayor of New York City. He ran unsuccessfully for president in 2020. It is well-documented that he has long hoped to buy a newspaper – either the WSJ or the NYT. I’d like to know something about Donald Graham’s discussions with Bloomberg before Graham decided to sell The Washington Post to Amazon billionaire Jeff Bezos at a bargain price. My hunch is that Bezos’s four children loomed large in his thinking (Graham was a third-generation steward of what after 75 years had become a family paper.)
Today Bloomberg is worth $60 billion. So why doesn’t he start a print newspaper? Name it for something other than himself. Model it, loosely, on the Financial Times. Print it at first in a dozen US cities, where dense home-delivery audiences exist. He is still young enough to enjoy presiding over an influential print paper for a dozen years or more. He already employs most of a first-rate staff. Moreover, he has two daughters, Georgina and Emma, living interesting lives, waiting in the wings.
David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville-based economicsprincipals.com, where this column originated.