Trump is currently exiting another in a long line of bankruptcies, giving Carl Icahn control over his namesake businesses, including the Trump Taj Mahal and Trump Plaza Hotel and Casino in Atlantic City.
Investment writer Chris DeMuth compares what would have happened to Trump’s wealth if he had simply passively invested in the Standard & Poor’s index (SPY) vs continuing to be a really bad businessman:
Trump branded casinos have had to use the bankruptcy process to protect it against litigation, cut labor cost, and restructure debt that it could not pay. Previous to the Trump Entertainment Resorts bankruptcy, Trump Atlantic City went bankrupt, then Trump Hotels & Casino Resorts went bankrupt, then Trump Atlantic City went bankrupt again.
The Trump Entertainment Resorts bankruptcy was necessary to deal with $285.6 million of outstanding secured debt as well as $13.5 million of trade debt and $6.6 million of unpaid interest. TER was able to use the courts to throw out the collective bargaining agreement covering 1,467 of its workers.
Whether or not Trump Entertainment Resorts, Trump Mortgage, Trump Steaks, etc. were great investments, they should be judged against what Trump would be worth had he passively invested his substantial inheritance in the S&P 500 (NYSEARCA:SPY).
Um...not so great.