Convicted
Guilty on all charges. Donald Trump is the first sitting or former president convicted of a felony in U.S. history, after a jury ruled he falsified business records to cover up a sex scandal with a porn star that could have sunk his 2016 campaign.
In normal times, that could mean the end of his political ambitions. Instead, in the wake of the ruling, money from Wall Street and Silicon Valley is flowing into his re-election campaign.
Republican megadonors are energized. “This verdict will have less than no impact on my support,” Omeed Malik, president of 1789 Capital and co-host of a Trump fundraiser last night at the Pierre Hotel, told Bloomberg. Andy Sabin, the metals magnate, was more direct. “I haven’t heard anyone who gives a damn…” he told CNBC of the conviction, using an expletive.
Hedge fund billionaire (and Biden critic) Bill Ackman will also endorse Trump.
Some big names in Silicon Valley are doubling down. David Sacks, the venture capitalist who will co-host a fundraiser for Trump in San Francisco next week, called it a “phony trial” and said the former president had many supporters in the tech world who were afraid to admit it. One of those who did was Shaun Maguire, a partner at Sequoia Capital, who donated $300,000 to Trump’s campaign after the ruling, although he acknowledged that the decision could cost him friends and hurt his business.
With the election likely to be decided by a handful of counties in swing states, the question is to what extent that big money heading to Trump will matter.
Discontent with President Biden is one of the reasons. Trump’s tough stance on immigration, low taxes and destruction of regulations has been a big draw for billionaires who may be calculating that an endorsement or donation now You will get bigger benefits if you win in November. Another possible calculation: Endorsing Trump at a low point could further amplify that return.
Trump has gained support among voters despite multiple controversies. The Republican still leads many polls even though yesterday’s ruling is his third consecutive judicial defeat (after the E. Jean Caroll defamation cases). Some supporters, like Blackstone CEO Steve Schwarzman, who distanced themselves from Trump over attempts to overturn the 2020 election and Republicans’ poor performance in the 2022 midterms, have done a U-turn to back him again. .
Trump allies such as Governor Ron DeSantis of Florida and staunch Biden critics such as Elon Musk criticized the trial, with the tech entrepreneur saying the ruling damaged “the public’s faith in the American legal system.”
Trump’s campaign is also seeking to capitalize on the conviction. On his campaign website was a “breaking news” banner with an urgent plea for cash, including “$100 if you believe President Trump did nothing wrong!”
The Biden campaign hopes to exploit it. The White House sees an opportunity to present the election to voters in clear terms, even if the ruling may do little to change the outcome of the election. “There is only one way to keep Donald Trump out of the Oval Office: at the ballot box,” Biden posted on X after the verdict in a call for donations.
Whats Next? X, Musk’s social media platform, will host live video meetings with Trump before the election (it’s a sign of how their warm relationship could be good for Musk’s business empire). Trump will hold a press conference today and must be sentenced. on July 11, four days before the start of the Republican National Convention. Will he face prison? Could he forgive himself? That’s not clear. Most likely, he will likely appeal, dragging the case further into the campaign season.
THIS IS WHAT’S HAPPENING
Bill Ackman is said to be weighing an initial public offering for Pershing Square. The billionaire investor plans to take his company public next year, The Wall Street Journal reports. He will sell a stake in Pershing Square ahead of an IPO that could value the company at about $10.5 billion, as Ackman looks to capitalize on his growing public profile through his prolific use of social media.
Skydance has improved its offer for Paramount. The studio led by David Ellison has submitted an improved offer for the entertainment giant, DealBook confirmed following a report in The Wall Street Journal. Skydance is now seen as the front-runner in the race to merge with Paramount, which owns MTV, CBS and the movie studio behind “Top Gun,” after Sony and Apollo pulled out of a $26 billion rival bid.
Eurozone inflation rises. Consumer prices rose an annualized 2.6 percent in May, more than economists’ expectations. Still, markets are pricing in the European Central Bank to cut interest rates at next week’s meeting. Investors will now turn their attention to US inflation data, due at 8:30 am ET.
TikTok is reportedly working on a clone of its algorithm. The company is hoping that making a duplicate of TikTok’s source code would lay the groundwork for separating its US assets, according to Reuters. The clock is ticking for the popular video app to divest from its Chinese parent, ByteDance, or be banned in the US.
Crypto Bulls Target DC
The cryptocurrency industry has had a good few months and is using that momentum to expand its reach in Washington ahead of the election. Andreessen Horowitz, the Silicon Valley venture capital firm, is the latest to increase donations, saying she would give $25 million to promote pro-crypto candidates on both sides of the aisle.
Recent victories have inspired cryptocurrency donors to double down. Chris Dixon, who heads Andreesen’s crypto efforts, said yesterday that the company’s donation to super PAC Fairshake and others, bringing its total donations this election cycle to $47 million, followed “a big week in DC and a series of electoral victories for cryptocurrency professionals.” candidates.” Just last week, the House passed a cryptocurrency bill that could create more regulatory clarity for the sector and the SEC said it would allow the creation of exchange-traded funds pegged to Ether, the second-largest approved crypto token.
Crypto money is flowing to super PACs. Fairshake told Axios that his war chest was more than $110 million, and that cryptocurrency-backed super PACs had raised more than $100 million before the latest donations arrived. The money has already been used to help defeat candidates seen as hostile to the industry. like Rep. Katie Porter, the California Democrat seeking a Senate seat.
Supporters say sentiment around cryptocurrencies is shifting in their direction. Ripple donated $25 million to Fairshake this week, its second donation of this size this election cycle, and said more would come as it faces the SEC. about XRP, its cryptocurrency. Brad Garlinghouse, CEO of Ripple, said the donation sent “a message to backward politicians that their failed policies will not be tolerated.”
Cryptocurrencies are gaining new followers. Donald Trump, once a cryptocurrency antagonist, now accepts digital asset donations. And this month, Democrats and Republicans in both chambers voted to rescind SEC guidance on crypto accounting rules that the industry opposed. President Biden has signaled that he would veto the congressional resolution, but has also indicated that he is willing to work with lawmakers on cryptocurrency legislation. For the industry, these are all signs that his strategy is working.
A new front opens in the chip war
The Middle East could become a new battleground in the fight between Washington and Beijing over chips, and that is spooking technology investors as Chinese leader Xi Jinping holds talks with Arab leaders to strengthen trade ties.
Shares of chipmakers Nvidia and AMD fell in premarket trading following a Bloomberg report that the Biden administration was slowing licensing high-end chips to the region over fears they could fall into the hands of Chinese companies. Semiconductors from these companies are considered a crucial component in the development of artificial intelligence. The White House maintains that keeping that technology away from Chinese companies is a matter of national security.
The Biden administration is reviewing how AI is developing in the Middle East, especially in Saudi Arabia and the United Arab Emirates, according to Bloomberg. It is unclear how long the research will last and what it may ultimately mean for chip shipments at a time when the Gulf region is tapping its oil riches to expand its artificial intelligence capabilities.
The White House finds itself in a difficult situation with the Middle East. A number of American tech giants, including Amazon, Google and IBM, have expanded their presence there and are taking advantage of the billions that oil-rich governments are spending to diversify their economies. Saudi Arabia has created a roughly $40 billion AI development fund, attracting investors from the likes of Silicon Valley heavyweights like Andreessen Horowitz. And Washington has already flexed its muscles: Last month, it orchestrated a deal to force Microsoft to invest in G42, an Emirati artificial intelligence startup, to exclude China.
Trade barriers have slowed Chinese companies’ access to advanced technology, but have not cut them off completely. The CHIPS and Science Act of 2022 was supposed to restrict US exports of high-end semiconductors to China. But Chinese companies have found solutions, often turning to a network of global trading partners to secure banned components. The new review by administration officials could be seen as a way to plug some of those holes.
China sees trade and diplomatic opportunities in the Middle East. Xi will hold a summit with Arab leaders in Beijing this week in an effort to deepen ties. Earlier this week, Lenovo, the Chinese technology company, said it would sell $2 billion worth of bonds to Saudi Arabia’s sovereign wealth fund and build a research and development center in Riyadh.
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Offers
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Citadel Securities named Jim Esposito, a top former Goldman Sachs executive, president as it takes on Wall Street in the lucrative market-making business. (Bloomberg)
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Infrastructure investment giant Brookfield is said to be teaming up with Singaporean investment fund Temasek to buy a French wind energy developer, Neoen, for $6.6 billion. (FOOT)
Policy
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Elon Musk agreed to testify in an SEC investigation into his purchase of Twitter in 2022. (Reuters)
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The U.S. Department of Labor accused Hyundai and three other companies in a lawsuit of using child labor on an assembly line in Alabama. (NY)
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