Business
California loves Dungeness crab. But concerns over whale safety have put the industry in peril
BODEGA BAY, Calif. — It was a calm January morning, the waters off Bodega Bay unusually smooth, but crab fisherman Dick Ogg couldn’t shake a grim feeling that the day wouldn’t go his way.
The Dungeness crab season had opened just a few weeks earlier — two months behind schedule — and was off to a slow start. “We’re working very hard to basically get nothing,” said Ogg.
The anemic hauls so early in the season mark the latest setback for California’s commercial Dungeness crab fishery, a roughly $45-million-a-year industry that delivers one of the state’s most iconic culinary delights.
Dick Ogg navigates his boat out of Bodega Bay in the predawn hours of a January morning, setting off for a 16-hour day of crab fishing.
The industry’s future has been complicated by another celebrated sea creature: Each year, a number of humpback whales migrating through California’s waters to and from tropical breeding grounds get entangled in commercial crab fishing gear, encounters that often end in mutilation or death. State regulators are intent on lowering the chances of whales coming into contact with the gear.
There’s reason to be concerned.
Since 1970, when the federal government listed humpback whales as “endangered” after they were hunted to near extinction, the population has made a fragile comeback. Whales along the West Coast have recovered at an estimated annual rate of 8.2% since the 1980s, according to the National Oceanic and Atmospheric Administration, with more than 4,500 humpback whales now feeding off California’s coast.
The state Department of Fish and Wildlife has imposed sharp restrictions on the crab industry over the last decade in an effort to protect that progress, as well as to safeguard populations of blue whales, gray whales and the critically endangered leatherback sea turtle.
The annual crab season — which historically ran from late fall to midsummer — has been repeatedly truncated, due to both whale safety concerns and elevated levels of domoic acid, a toxin that builds up in shellfish. This year’s season opened after New Year’s and is likely to end in spring. The shortened timeline gives whales more time to migrate without risk of entanglement, but has cut California’s commercial crabbers out of the lucrative Thanksgiving, Christmas and New Year’s markets, devastating the fleet’s income expectations.
Fisherman Dick Ogg, right, gives instructions to crew members Bradlee Titus, left, and Axel Bjorklund during a disappointing day of crab fishing.
In addition, most of the California crab fleet is under a mandatory order this year to use 50% less gear, meaning the fleet has fewer weeks to fish and can use just a fraction of its traps. And the weeks that are open to crabbing pose some of the most dangerous wind and weather conditions of the season.
“We’ve had times we shouldn’t be out,” said Ogg, 71. “We have to go. We don’t have a choice.”
After making what feels like one concession after the next, he wonders whether the fishery can survive any more changes.
And now the crabs aren’t biting.
“We’ve adjusted almost as much as we possibly can,” Ogg says of the tighter whale safety regulations California has imposed on the crab fishery.
Early on a Thursday in late January, Ogg readied his 54-foot fiberglass boat, the Karen Jeanne, for a 16-hour day of hauling 200 crab pots. It was barely 4:30 a.m. at the Spud Point Marina, and Ogg’s crew, Bradlee Titus, 34, and Axel Bjorklund, 22, both multi-generational fishermen, prepared the deck by washing equipment, filling water buckets and packing jars with bait — a stinky, oily mashup of mackerel and squid. At the helm, Ogg tracked water currents and the weather forecast as he moved the boat out of Bodega Bay, past Point Reyes toward the Farallon Islands and San Francisco skyline.
Ogg was adopted from Japan, and has lived most of his life near Bodega Bay, a fishing town on the Sonoma County coast. He didn’t start out in commercial fishing, but eased into it about 25 years ago, after more than three decades working as an electrician at Sonoma State University.
He is lean and fit from years of diving and martial arts training. As a captain, he is regimented, but also gentle with his crew. He pays them 17% off the top after every trip, no matter how much, or little, crab is brought in. He’ll make a batch of pizza bread before fishing trips and keeps the boat stocked with snacks. On overnight trips, he gives Titus and Bjorklund the cabin below deck, while he sleeps on the floor of the wheelhouse with his three rescue dogs.
This year’s California crabbing season, already truncated, has gotten off to an anemic start.
He bought the Karen Jeanne about 11 years ago. He extended the vessel by 8 feet, adding a new motor and a big tank for the bundles of crab and massive salmon he dreamed of catching — but never eating. Ogg has been vegetarian for more than 40 years.
“For me, it’s about providing that resource,” Ogg said. “The public can’t get out here.”
Crab pots sit on the ocean floor, with more than 200 feet of rope attaching them to buoys at the surface. A bait jar inside the pot tempts the crab into a one-way entrance.
Titus and Bjorklund move in a choreographed dance to haul in the crabs using a process that takes about one minute and 30 seconds per pot: Grab the buoy and attach the rope to a crab hauler; raise the 100-pound pot out of the water; empty the crabs into a holding tank; replace the old bait with a fresh jar; toss the female and small crabs back overboard; and throw the larger males into the tank. Then they push the empty pot back into the water and begin the process again.
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1. Titus, left, and Bjorklund sort Dungeness crabs, throwing back female and undersized crabs. 2. Bjorklund sizes crabs aboard the Karen Jeanne. 3. Ogg, right, and Titus place boxes of bait into a freezer.
The cycle repeats itself hour after hour, a meditation in back-breaking labor, as Ogg navigates through his lines of crab pots. On this day, each pot would yield eight to 12 crabs, a small harvest compared with the dozens of crabs the pots are built to hold. After throwing out the “shorts” and females, they’re lucky to keep two. The team stays focused, but it’s easy to see the disappointment.
“We’re going backwards,” Bjorklund yelled at one point.
Ogg, at the wheel, shook his head. “On this particular trip, I won’t make any money,” he said. The bait alone tallies around $1,200 each trip, on top of fuel costs and upkeep. The one bright spot was that the fleet had negotiated a relatively high price of $7.25 per pound with buyers, meaning even for a low-volume trip he might break even.
Ogg has come to accept the shortened season. He’s cut the number of pots he puts in the water in compliance with state rules. He’s bracing to spend up to $20,000 on fishing lines next season in preparation for new state rules requiring the fishery to use a specific color of rope, in an effort to better identify what gear is entangling the whales.
“We’ve adjusted almost as much as we possibly can,” he said.
He serves on a dozen state and regional committees focused on the Dungeness crab industry. This year, he hopes to be added to a new federal task force set up to find solutions to whale entanglement. Crabbers hope the federal government will relax some regulations, but there’s a chance the task force just adds more.
Seagulls gather off the aft of the fishing boat Karen Jeanne.
Ogg emphasized his respect for whales. “I don’t want to have any problems with these” whales, he said. “I love these animals.”
But he likened fishing to driving a car. You can put on your seat belt and drive slower, but there will still be accidents.
“They want zero entanglements. And zero is not an achievable number.”
There were 34 whale entanglements, including 29 humpbacks, recorded off the Pacific Coast in 2024, a six-year high, according to preliminary data from the National Oceanic and Atmospheric Administration.
Twenty-seven whales were reported entangled in 2023 and 30 whales in 2022, which environmental groups say is probably an undercount. It’s an improvement from years past; in 2016, 71 whale entanglements were reported off the coasts of Washington, Oregon and California, prompting conservationists to file a lawsuit against California. The settlement agreement led to many of the current regulations.
The humpback whales are divided into subgroups: one that travels to Mexico for the winter, listed as “threatened” under the federal Endangered Species Act; and a smaller group that breeds off the coast of Central America, which is listed in the more urgent “endangered” category. Because it’s nearly impossible to distinguish one group from the other, any entanglement is treated as a deadly risk to the endangered population.
“Sometimes they’re able to free themselves. Often they’re not,” said Ryan Bartling, senior environmental scientist at the state Department of Fish and Wildlife.
“They want zero entanglements,” Ogg says of the push for tighter whale protections. “And zero is not an achievable number.”
Here’s where things get complicated. Wildlife groups, the state and fishery leaders disagree on what number of entanglements is “acceptable,” meaning what would constitute a “negligible impact” on the whale population. Federal and state guidance isn’t always clear, often leaving conservationists and crews confused.
Either way, commercial Dungeness crab gear has contributed to an annual average of 5.2 humpback entanglements since 2014, according to national and state data, more than double what federal rules allow.
Nancy Black, a marine biologist and owner of Monterey Bay Whale Watch, is in the camp that wants to see the number of entanglements cut to zero. “I don’t think any of them should be entangled at all,” she said.
Black has seen a steady increase in the humpback whale population in recent decades, and wants to see even greater efforts to reduce run-ins with the crab fishery. She partners with other scientists to report whale entanglements, so rescue teams can be dispatched to save the animals.
“It’s really distressing,” she said. “Especially if you see one that has had it on for a long time, or it’s cutting through its body or it’s wrapped around its mouth.”
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1. Bjorklund throws crab buoys into the sea. 2. Bjorklund stacks crab pots.
Sarah Bates, who commercially fishes salmon, also wants to protect the whales. Commercial fishers are invested in the ocean ecosystem, she said. But there’s a growing concern that the state has prioritized whale safety at the expense of the fishery, even as the whale population increases.
California’s fishery was already struggling from the cancellation of the 2023 and 2024 salmon seasons; salmon counts had plummeted, a crisis attributed to drought and the state’s overtaxed river systems, and the hope was that a reprieve would help their numbers rebound. Now, given restrictions on the crab fleet combined with a low-volume season, “we’re belly-up,” Bates said.
“We’re putting our California fishermen out of business, while we sit and eat Scottish salmon,” says Lisa Damrosch, executive director of the Pacific Coast Federation of Fishermen’s Assns.
Lisa Damrosch, executive director of the Pacific Coast Federation of Fishermen’s Assns., noted that the industry is inherently unpredictable.
“The weather, a wild, natural product that you’re not planting or watering or controlling,” said Damrosch, whose family has fished out of Half Moon Bay for over 100 years. “Now we’re adding whales, which are also unpredictable and not something we can control as human beings.”
As the California fishery becomes increasingly regulated, she said, it creates a market of opportunity for someone else.
“We’re putting our California fishermen out of business, while we sit and eat Scottish salmon,” Damrosch said, “and look out at the oceans and feel so good about ourselves.”
In a few weeks, whales could return to California waters, potentially bringing the crab season to a halt.
But Stephen Melz will still be fishing.
Melz lives in Half Moon Bay, and has been commercially fishing for nearly four decades. For the last two years, he’s participated in a pilot program testing pop-up crab gear.
While traditional crab gear uses vertical lines to connect the pots to buoys at the surface, pop-up gear keeps the rope and a flotation device on the ocean floor with the trap. To retrieve the pot, Melz uses an app on his phone that sends an acoustic signal to the trap that releases the rope and buoy, sending them back to the surface.
“It sounded like science fiction to me, but this stuff actually works,” said Geoff Shester, California campaign director and senior scientist at Oceana.
Shester promotes pop-up gear as an alternative to vertical ropes, a shift he believes could protect whales and still establish some stability for crab fishers. The pop-up gear helped bring in 229,000 pounds of crab during the 2024 spring fishery, according to Oceana, “worth $1.5 million, with high reliability and minimal gear loss.”
Many fishermen, including Ogg, remain skeptical. They’ve invested tens of thousands of dollars in their traditional equipment, and don’t trust the pop-up gear success rates touted by environmental organizations.
Melz agrees that traditional gear is far easier to use at the start of the season, when fleets are navigating choppy waters. But in spring, when conditions are more favorable, the pop-up gear is a great option, he said.
“We’d all like to be able to use our traditional gear, absolutely,” he said. “But if we come to a point where the powers that be decide that the whale presence is too much to use traditional gear, and my option is either to use pop-up gear that works excellently, or to be sitting on the dock not working, you can see what answer I’m going to take.”
The morning after Ogg’s long day of pulling pots, he takes the Karen Jeanne to the Tides Wharf, a seafood wholesaler in Bodega Bay, to offload his crabs.
“This might be the smallest load I’ve ever brought in,” Ogg said. “If we have 1,000 pounds, I’d just go nuts.”
“I’m guessing we have 750,” Titus responded.
Titus and Bjorklund shoveled mounds of ice over the crabs, putting them in a hibernating state to make it easier to transfer them into containers to be weighed.
Amid heavier crabbing regulations, Ogg, left, wonders whether there is a future for the young fishermen who serve as his crew members.
As they worked, Ogg flipped through his iPad, pulling up photos from prior seasons. At the start of the 2017 season, the boat’s tank nearly overflowed with crab, netting about $30,000 from one day on the water, even at a wholesale price significantly lower than $7.25 per pound.
He’d like to keep fishing for another 10 years. But it’s getting harder. “I’m still physically capable, but my body is not happy,” he said. And at this rate, he wonders, is there any future left for young fishermen like Titus and Bjorklund?
“It’s going to look completely different,” he said. “There’s going to be regulations that control us. So how do we adapt to make that work?”
The crabs were lifted off the boat and weighed: 855 pounds of fresh crab meat to be transformed into sauteed crab cakes, a Louie salad or thrown into some cioppino.
Gross earnings: $6,200. After paying the crew and the costs of fuel and bait, Ogg would net about $2,000.
Worse than usual. Better than expected. The best part was he didn’t see any whales.
Ships near the Strait of Hormuz before and after attacks began
Every day, around 80 oil and gas tankers typically pass through the Strait of Hormuz, the narrow waterway off Iran’s southern coast that carries a fifth of the world’s oil and a significant amount of natural gas.
On Monday, just two oil and gas tankers appear to have crossed the strait, according to a New York Times analysis of shipping activity from Kpler, an industry data firm. Since then, one tanker passed through.
“It’s a de facto closure,” said Dan Pickering, chief investment officer of Pickering Energy Partners, a Houston financial services firm. “You’ve got a significant number of vessels on either side of the strait but no one is willing to go through.”
Tankers have been staying away from Hormuz since the U.S.-Israeli attacks on Iran that began on Saturday. A prolonged conflict could ripple broadly across the global economy, threatening the energy supplies of countries halfway around the world and stoking inflation.
International oil prices have climbed 12 percent since the fighting began, trading Tuesday around $81 a barrel, and natural gas prices have surged in Europe and in Asia.
A senior Iranian military official threatened on Monday to “set on fire” any ships traveling through the Strait of Hormuz. Vessels in the region have already come under attack. Several oil and gas facilities have also been struck or affected by nearby shelling, though the damage did not initially appear to be catastrophic.
Where ships and energy facilities have been damaged
A fire broke out Tuesday at a major energy hub in Fujairah, United Arab Emirates, from the falling debris of a downed drone, the authorities said. On Monday, Qatar halted production of liquefied natural gas, or fuel that has been cooled so that it can be transported on ships, after attacks on its facilities.
The sharp reduction in tanker traffic is reducing the supply of oil and gas to world markets, pushing up prices for both commodities. And the longer that ships stay away from the Strait of Hormuz, the less oil and gas get out to the world, which could raise prices even more.
Shipping companies have paused their tankers to protect their crew and cargo, and because insurance companies are charging significantly more to cover vessels in the conflict area.
On Tuesday, President Trump said that “if necessary,” the U.S. Navy would begin escorting tankers through the strait. He also said a U.S. government agency would begin offering “political risk insurance” to shipping lines in the area.
In addition to tankers, other large vessels regularly go through the strait, including car carriers and container ships. In normal conditions, nearly 160 make the trip each day.
Some ships in the region turn off the devices that broadcast their positions, while others transmit false locations — making it hard to give a full picture of the traffic in the strait.
The Shiva is a small oil tanker that has repeatedly faked its location, according to TankerTrackers.com, which tracks global oil shipments. It is suspected of carrying sanctioned Iranian oil, according to Kpler. The Shiva was one of the two tankers that crossed the strait on Monday.
The oil and gas that typically move through the strait come from big producing countries like Saudi Arabia, Iraq, Iran and United Arab Emirates, and are exported around the world.
Where tankers moving through the Strait have traveled
In 2024, more than 80 percent of the oil and gas transported through the Strait of Hormuz went to Asia. China, India, Japan and South Korea were the top importers, according to the U.S. Energy Information Administration.
Countries have energy stockpiles that could last them into the coming months, but a continued shutdown of the strait could damage their economies.
Several big disruptions have roiled supply chains in recent years, but the tanker standstill in the Strait of Hormuz could have an outsize impact.
Paramount Skydance’s jubilation over its come-from-behind victory to claim Warner Bros. Discovery has entered a new phase:
Call it the deal-debt hangover.
Two major ratings agencies have raised concerns about Paramount’s credit because of the enormous debt the David Ellison-led company will have to shoulder — at least $79 billion — once it absorbs the larger Warner Bros. Discovery, bringing CNN, HBO, TBS and Cartoon Network into the Paramount fold.
Fitch Ratings said Monday that it placed Paramount on its “negative” ratings watch, and downgraded its credit to BB+ from BBB-, which puts the company’s credit into “junk” territory. Fitch said it took action due to “uncertainty” surrounding Paramount’s $110-billion deal for Warner Bros. Discovery, which the boards of both companies approved on Friday.
S&P Global Ratings took similar action.
To finance the Warner takeover, Ellison’s billionaire father, Larry Ellison, has agreed to guarantee the $45.7 billion in equity needed. Bank of America, Citibank and Apollo Global have agreed to provide Paramount with more than $54 billion in debt financing.
“Potential credit risks include the prospective debt-funded structure, Fitch’s expectation of materially elevated leverage and limited visibility on post-transaction financial policy and capital structure,” Fitch said.
Late last week, Paramount sent $2.8 billion to Netflix as a “termination fee” to officially end the streaming giant’s pursuit of Warner Bros. That payment paved the way for Warner and Paramount’s board to enter into the new merger agreement.
Paramount hopes the merger will be wrapped up by the end of September. It needs the approval of Warner Bros. Discovery shareholders and regulators, including the European Union.
Paramount executives acknowledged this week the new company would emerge with $79 billion in debt — a considerably higher total than what Warner Bros. Discovery had following its spinoff from AT&T. That 2022 transaction left Warner Bros. Discovery with nearly $55 billion of debt, a burden that led to endless waves of cost-cutting, including thousands of layoffs and dozens of canceled projects.
Warner still has $33.5 billion in debt, a lingering legacy that will be passed on to Paramount.
Paramount plans to restructure about $15 billion in Warner Bros. Discovery’s existing debt.
Paramount CEO David Ellison at a 2024 movie premiere for a Netflix show.
(Evan Agostini / Invision / AP)
Paramount told Wall Street it would find more than $6 billion in cost cuts or “synergies” within three years — a number that has weighed heavily on entertainment industry workers, particularly in Los Angeles.
Hollywood already is reeling from previous mergers in addition to a sharp pullback in film and television production locally as filmmakers chase tax credits offered overseas and in other states, including New York and New Jersey.
Some entertainment executives, including Netflix Co-Chief Executive Ted Sarandos, have speculated that Paramount will need to find more than $10 billion in cost cuts to make the math work. More recently, Sarandos went higher, telling Bloomberg News that Paramount may need $16 billion in cuts.
Cognizant of widespread fears about additional layoffs, Paramount Chief Operating Officer Andrew Gordon took steps this week to try to tamp down such concerns.
Gordon is a former Goldman Sachs banker and a former executive with RedBird Capital Partners, an investor in Paramount and the proposed Warner Bros. deal. He joined Paramount last August as part of the Ellison takeover.
During a conference call Monday with analysts, Gordon said Paramount would look beyond the workforce for cuts because the company wants to maintain its film and TV production levels.
Paramount plans to look for cost savings by consolidating the “technology stacks and cloud providers” for its streaming services, including Paramount+ and HBO Max, Gordon said. The company also would search for reductions in corporate overhead, marketing expenses, procurement, business services and “optimizing the combined real estate footprint.”
It’s unclear whether Paramount would sell the historic Melrose Avenue lot or simply centralize the sprawling operations onto the Warner Bros. and Paramount lots in Burbank and Hollywood.
Workers are scattered throughout the region.
HBO, owned by Warner Bros. Discovery, maintains its West Coast headquarters in Culver City; CBS television stations operate from CBS’ former lot off Radford Avenue in Studio City; and CBS Entertainment and Paramount cable channels executive teams are located in a high-rise off Gower Street and Sunset Boulevard, blocks from the Paramount movie studio lot.
“The combination of PSKY and WBD could create a materially stronger business than either individual entity,” Standard & Poor’s said in its note to investors. “However, this transaction presents unique challenges because it would involve the combination of three companies, with the smallest, Skydance, being the controlling entity.”
David Ellison’s production firm, Skydance Media, was the entity that bought Paramount, creating Paramount Skydance.
Ellison has not announced what the combined company will be called.
Paramount shares closed down more than 6% Tuesday to $12.45.
Warner Bros. Discovery fell 1% to $28.20. Netflix added less than 1% to close at $97.70.
So much Trump-related news has appeared lately on the airwaves and in web pixels — what with Iran and Epstein and Minnesota and so on — that inevitably a nugget will fall between the cracks.
That seems to have been the fate of the most recent annual financial report of Trump Media and Technology Group, which covered calendar year 2025 and was issued Friday.
Trump Media, which is 52% owned by Donald Trump and trades on Nasdaq with a ticker symbol based on his initials (DJT), is the holding company for Trump’s social media platform, Truth Social.
The value of TMTG’s brand may diminish if the popularity of President Donald J. Trump were to suffer.
— A risk factor disclosed by Trump Media
The annual financial disclosure has garnered minimal press coverage. That’s a pity, because it makes fascinating reading, though not in a good way.
Here are the top and bottom lines from the 10-k annual report: Trump Media lost $712.1 million last year on revenue of about $3.7 million. That’s quite a bit worse than its performance in 2024, when it lost $409 million on revenue of about $3.6 million. The company attributed most of the flood of red ink to “loss from investments,” of which more in a moment.
Truth Social isn’t an especially strong keystone of this operation. The platform is chiefly an outlet for Trump’s social media ramblings and the occasional official White House statements. But no one has to sign in to Truth Social to see them — they’re almost invariably picked up by the news media or reposted by users on other platforms such as X.
That might explain Truth Social’s relatively scrawny user base. The platform is estimated to have about 2 million active users, according to the analytical firm Search Logistics. By comparison, X has about 450 million monthly active users and Facebook has more than 2.9 billion.
It’s no mystery, then, why TMTG disdains “traditional performance metrics like average revenue per user, ad impressions and pricing, or active user accounts, including monthly and daily active users,” according to its annual report.
Relying on those metrics, which are used to judge TMTG’s social media rivals, “might not align with the best interests of TMTG or its stockholders, as it could lead to short-term decision-making at the expense of long-term innovation and value creation.”
Instead, the company says it should be evaluated based on “its commitment to a robust business plan that includes introducing innovative features, new products, new technologies.” But it also acknowledges that, at its heart, TMTG is a proxy for “the reputation and popularity of President Donald J. Trump.” The company warns that “the value of TMTG’s brand may diminish if the popularity of President Donald J. Trump were to suffer.”
How has that played out in real time? Trump Media notched its highest closing price as a public company, $66.22, on March 27, 2024, the day after its initial public offering. In midday trading Monday, the shares were quoted at $11.08, for a loss of 83% since the IPO.
One can’t quibble with stock market price quotes; nor can one finagle annual profit and loss statements, at least not without receiving questions, and perhaps lawsuit complaints, from attentive investors and the Securities and Exchange Commission.
In recent months, TMTG has engaged in a number of baroque financial transactions.
In May, the company announced that it was planning to raise $3.5 billion from institutions to invest in bitcoin, with the money to come from issues of common and preferred shares. The goal was to climb onto the cryptocurrency train, which Trump himself was fueling by, among other things, issuing an executive order promoting the expansion of crypto in the U.S. and denigrating enforcement efforts by the Biden administration as reflecting a “war on cryptocurrency.”
Under Trump, federal regulators have dropped numerous investigations related to cryptocurrencies. Trump has also talked about creating a government crypto strategic reserve, which would entail large government purchases of bitcoin and other cryptocurrencies; a March 3 announcement on that subject briefly sent bitcoin prices soaring by nearly 20%, though they promptly fell back.
Then there’s TMTG’s relationship with Crypto.com, a Singapore-based crypto “service provider” best known to Angelenos unfamiliar with the crypto world as the firm with naming rights to the Los Angeles arena that hosts the NBA Lakers and Clippers, WNBA Sparks and NHL Kings.
In August, Crypto.com and TMTG announced a deal in which TMTG would pursue a crypto treasury strategy consisting mostly of Cronos tokens, a cryptocurrency sponsored by Crypto.com. The initial infusion would consist of 6.4 billion Cronos valued at $1 billion, or about 15.8 cents per Cronos.
As of Dec. 31, TMTG said in its 10-K, it owned 756.1 million Cronos, acquired at a cost of about $114 million, or 15 cents each. By year’s end, they were worth only about nine cents each, for a paper loss of about $46 million. In trading this week, Cronos was quoted at about 7.6 cents, producing a paper loss for TMTG of about $56.5 million, or roughly half the investment.
The financial maneuvering involved in this trade is a little dizzying. The initial transaction was a 50% stock, 50% cash trade in which Crypto.com bought $50 million in TMTG stock and TMTG bought $105 million in Cronos. Who gained in this deal? It’s almost impossible to say.
Crypto.com did gain, if not purely in cash, then arguably through the Trump administration’s good graces.
On March 27, the SEC formally closed an investigation of the company that it had launched during the Biden administration, when the agency was headed by a known crypto skeptic, Gary Gensler. Trump appointed a crypto-friendly regulator, Paul Atkins, as Gensler’s successor.
It’s reasonable to note that as a business model, crypto treasuries have been in vogue over the last year or so, allowing investors to play the crypto market without all the complexities of actually buying and holding the digital assets by buying shares in treasury companies.
I asked Crypto.com whether the steady decline in Cronos’ price suggested that the hookup with TMTG wasn’t bearing fruit. “The fluctuation in value during this time period is consistent with the entire crypto market, which is typical in a bear market,” company spokeswoman Victoria Davis told me by email.
Davis also asserted that the SEC’s investigation of the company had been closed by Gensler, “not the current administration” (i.e., Trump). That’s misleading, at best. Gensler put the investigation on hold after the 2024 election, when it became clear that Trump was going to be in charge.
Crypto.com’s March 27 announcement of the formal end of the case attributed the action to “the current SEC leadership” and blamed the case on “the previous administration.” I asked Davis to explain the discrepancy but got no reply.
TMTG, like Crypto.com, attributed the decline in Cronos’ value to the secular bear market raging in the entire cryptocurrency space, a reflection of “temporary price swings across the crypto market,” said TMTG spokeswoman Shannon Devine. She said the price decline “will not diminish our enthusiasm for the enormous potential of the [CRONOS] ecosystem.”
Trump’s coziness with crypto companies hasn’t gone unnoticed by Democrats on the House Judiciary Committee, who issued a scathing report on the topic in November. (The White House scoffed at the report, saying in response to the report that Trump “only acts in the best interests of the American public.”)
In mid-December, TMTG launched yet another remaking — this time, plunging into the business of fusion power. The instrument is TAE Technologies, a Foothill Ranch-based company working to develop the technology of nuclear fusion as a clean energy source. According to a Dec. 18 announcement, TMTG and TAE will merge, creating what they say is a $6-billion company.
According to the announcement, TMTG will contribute $200 million to the merged company when the deal closes in mid-2026, and an additional $100 million subsequently. Following the merger, TMTG said last month, it will consider spinning off Truth Social into a new publicly traded company.
These arrangements are murky. TAE is privately held and the value of Truth Social is conjectural at best, so TMTG shareholders could be hard-pressed to assess their gains or losses from the merger and spin-off.
What makes them even murkier is the speculative nature of fusion as an electrical power source. Although numerous companies have leaped into the field — and TAE, which has been backed by Alphabet, the parent of Google, is among the oldest — none has shown the capability of generating electrical power at commercial scale with the elusive technology.
Although some researchers say that fusion could become a technically and economically feasible power source within 10 years, only in 2022 did fusion researchers (at Lawrence Livermore National Laboratory) achieve the goal of using fusion to produce more energy than is required to sustain a reaction. They were able to do so only for less than a billionth of a second.
Others working on the technology have expressed doubts that fusion could become a viable power source before the 2040s. The technical challenges, including how to convert the energy produced by a fusion reactor into electricity, remain daunting.
All this points to the fundamental question of what TMTG is supposed to be. TMTG’s original mission, according to its own publicity statements, was to build Truth Social into an alternative social media platform “to end Big Tech’s assault on free speech by opening up the Internet.”
Spinning off Truth Social would place that goal on the side. TMTG is on its way too becoming a hodgepodge of crypto, fusion and other investments selected without regard to whether they fit together or are even achievable. The only constant is Trump himself.
If you want to invest in him, TMTG may be the best way to do it. But judging from its latest financial disclosure, that’s not the same as being a good way to do it.
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