This Ticker is the Endgame

Malt Liquidity 133

Now this stock is the ENDGAME. It’s the Shitcoin of Shitcos. Imagine telling your coworkers that you’re QUITTING because ticker DJT MOONED. Imagine the media reporting on DJT. Ticker is DJT breaking 1 BILLION market cap. Now unless you hate money, go ahead and [censored for compliance].

The phrase “attention economy” gets bandied about a lot, so it’s worth thinking about it more precisely given the context of this post. If we think about the old basis of “fundamental value”, we come to something along these lines:

The vast majority of money that moves in and around the market is based on the philosophy that whatever is invested in will create future cash flow rewarding current shareholders, who hold a right to their share of the output… Investing is driven by valuation — taking snapshots of a company’s performance over time and stringing them together to estimate future outlook. The question valuation asks is very simple: given an investment in a company, what do I own now, what am I expected to own in the future, and how much is it worth at present value?

But when dollars are untethered from productivity, we get a different form of thinking, where Paris Hilton is more of a pioneer than Benjamin Graham. No longer is future cash flows the driver of valuation, but rather how much attention paid convert to bid? When we look at it from this purview, we arrive at my concept of “tradable hype” which explains a lot of the crypto/resale market:

A speculative purchase of a pair of limited edition Nike shoes could reasonably be thought of as a bet on the employees’ efforts to increase the brand’s reputation and appeal and be electronically traded in a similar manner to a token…

Although tokens might trade in a quasi-equity style, they aren’t equity — they have no place in the cap stack and don’t actually represent any ownership in the company. They operate almost as a tradable representation of “hype”, like a wine from a vineyard that is growing in reputation might appreciate.

From here, the concept of conversion rates (ad spend), “stickiness” of attention (twitch subscribers) and the rest of the modern day economy that makes your head shake should trivially follow — the proof is left as an exercise to the reader.

In a traditional finance sense, of course, the pinnacle examples are meme stocks and SPACs, which I don’t need to cover any more than I already have in the archive. But note that attention is also a function of clout — in a sense, exactly how much you can make the world revolve around you:

The idea of realizing gains in clout scales relatively well too - while investment banks only care about cash, the SPAC itself is the promoter cashing in on their clout to gain implicit stakes in the companies they reverse merge with. And obviously I have written about the Elon “north star” effect, which turned TSLA into a tradable Patreon subscription.

Do I really need to explain how much of the world revolves around Donald Trump?

DWAC, for all intents and purposes, was a failed SPAC. For over a year, there has been an inability to get shareholders to vote to merge what was essentially Truth Social and a bunch of random plans on paper with the shell. But, of course, when Trump needed the liquidity for that insane bond, the merger went through and started trading today. Some hilarious numbers:

The company estimates its social media app will reach 10mn users in 2024 and double that number next year, according to a presentation from December 2023…

TMTG has so far failed to make a profit, losing $49mn in the first nine months of last year and delivering just $3.4mn in revenue.

At time of writing, DJT is somewhere above a $2 bil market cap. Which brings me back to HPOS10i:

Take HarryPotterObamaSonic10Inu (“HPOS10i”) coin, for example, which, at the time of writing, has a market cap of over $100 million, or DogeCoin, which holds a market cap above $10 billion and a daily trading volume in the high 9 figures. These coins trade like stocks in the sense that they have elaborate charts, indicators, order books, and market makers, but what exactly are they?…

In essence — people buy it because it is fun to play along, and hey, it might go up in the meantime. People trade it because there is enough volatility in the price action to potentially buy low and sell high. The market capitalization itself is a meme (as in “hey, this Sonic coin has reached $150mm, maybe it can do a billion”) so it could hardly be thought of as promotion from someone touting benefits of an attached, extended ecosystem. Also, the ticker is $BITCOIN.

About a month ago, there was a fight between BitBoy and More Light (HPOS10i dev). I assure you it’s pretty damn entertaining.

Alright, a spoiler is necessary to make the point: Bitboy got the win, with his right fist delivering a 10% drop on $BITCOIN.

Talking with some HP10 people after, at first, they thought the coin would go down (as it did.) But then a funny thing happened:

Everyone realized, all of a sudden, that the attention, of course, drives bid when your entire concept is going viral and getting people to meme along. In a sense, that’s all the price action means — the market cap is totally meaningless (unless it hits the threshold that it can be joked about), but the attention-to-bid volume conversion is genuinely bullish, so long as volume can be maintained. Note my discussion yesterday:

What we realize is that, beyond all the waxing poetic about the “philosophy of money” and “postmodern markets”, the only thing that matters anymore is “number go up”. You can call it (3,3), Marxism, “everyone dependent on the same trade”, or whatever you want, but the core point is that nobody values bid-side liquidity the same as ask-side liquidity at the moment, so all you can do is stay long with everyone else. Unless this pattern of behavior cohesively breaks — and there’s no “one way” to do this — you will always get a rebound after, say, an NVDA selloff or a temporary dip in housing prices…

or, say, Bitboy scoring a couple knockdowns and a victory in a karate fight. This is all TrumpCoin (sorry, that exists) DJT is — there’s absolutely nothing to it other than “does Trump drive the bid?” It remains to be seen whether anyone actually cares that there’s nothing really there other than Trump saying “screw Twitter, I’m going to Truth.”

We already have a testcase — TrumpCoin. MAGA/USD has been running pretty hot this year

and I honestly see no reason why DJT can’t maintain some of the pop purely off of vibes. The center of the English-language politics, business, and legal universe for nearly a decade straight is the best test case for whether a “discounted attention-bid flow” model is sustainable and tradable and doesn’t just brick everything and go to zero. Judging by the fact that SPACs do fine until they lose their hype, I think DJT has a much longer runtime than people think (and has the same election clarity breakpoint as my thesis for stocks and business generally.)

This, I think, is the lesson to really take away from what ES futures did to the idea of SPY or BTC ETF’s do to the idea of an asset. The future originated as a way to create a forward deliverable of rice harvests not yet received to hedge against price swings. Does it really make sense to have a cash-settled index future that ends up just tracking the index essentially 1-to-1 in real time thanks to HFT? What exactly is a BTC future or an ETF?

There is an idea of an asset, some kind of abstraction, but it’s some sort of entity, something illusory, and though you can trade it, “own” it, “hold” it, profit from it, post about it, read about it on the news, discuss it, and maybe even build your lifestyle around it, it’s simply not there. Good luck explaining why Donald Trump isn’t a billionaire this time around, I guess.