If you believe it, here are some rich Irony: At least two multibillionaires who made their money in the world of careful betting have all but admitted that they neglected to do even the slightest research before throwing large sums at Republican presidential candidate Ron DeSantis.
You probably wouldn’t agree with that characterization. But the only alternative explanation is what they may be trying to hide: that they are distancing themselves so they don’t drown next to the sinking ship that is DeSantis’ presidential campaign.
The ultra-rich in question — hedge fund magnate Ken Griffin and online brokerage founder Thomas Peterffy — recently swore off playing sugar daddy to DeSantis. Peterffy said in April that he didn’t like the Florida governor’s abortion restrictions. Griffin is no more desire about some of his government tactics.
What they’re really saying is that they haven’t done their homework on DeSantis, who has espoused extremism and authoritarianism since the beginning of his political career. They essentially claim they bought it sight unseen. It’s a shocking admission from the one percenters, because even the vest-wearing 20-year-old interns on Wall Street know the importance of due diligence in the research phase leading up to a major investment.
Whether it’s a large portion or the whole thing, when you’re buying into a company, you really want to take a close look at it to make sure you don’t get burned. Betting on political candidates is little different. In both cases, you’re looking for a return on investment.
Griffin and Peterffy supported DeSantis for governor in 2018 and again before his re-election in 2022. Peterffy has donated at least $550,000, a far more forgivable sum than Griffin’s total of over $10 million. Your donations to his re-election campaign (more of a formality than a competition) were de facto endorsements of DeSantis’ presidential bid, as evidenced by the millions he contributed transmitted from his state war chest to his federal PAC after re-election.
But the warning signs — like DeSantis’ anti-abortion stance or his penchant for arming the government — have always been there. From a business perspective, pouring so much money into DeSantis, only to later, is like buying and selling Apple, Inc. after realizing that the company doesn’t sell Red Delicious, Granny Smith, Honeycrisp or other tree fruits due to his policies to resign varieties.
DeSantis has not changed his position on abortion. In 2018 he has promised to sign a bill banning the procedure after detecting a fetal heartbeat. That’s consistent with DeSantis’ six-week suspension signed legally In April. Nevertheless, Peterffy acts as if the abortion law came as a surprise to him and himself allegedly Nelson Peltz, another billionaire who was in love with DeSantis.
Peterffy has also said he doesn’t like DeSantis banning books. Griffin’s biggest problem is the governor’s fight against Disney. Both are problems they should have seen coming, because DeSantis wears the badge of authoritarianism on his sleeve.
DeSantis is a product of the Freedom Caucus in Congress and about as far right as you can get in the Capitol — unless you storm in. He has also never shied away from using the government as a weapon against corporations. In 2019, days after taking office, he started a government boycott of Airbnb after the short-term rental company delisted properties in the West Bank. During his 2021 State of the State address, weeks before Griffin injected $5 million into DeSantis’ re-election campaign, the governor said promised to launch an attack against “Big Tech” companies.
Still a somewhat confused Griffin took He told CNBC last week that he was surprised by the governor’s hard line on Disney, which he said “doesn’t sit well with the ethos of Florida.”
“From a business perspective, pouring so much money into DeSantis, only to later, is like buying and selling Apple, Inc. after realizing that the company doesn’t sell Red Delicious, Granny Smith, Honeycrisp or other tree fruits due to his policies to resign varieties.”
If what they say is true, these billionaires reveal a surprising level of control and a lack of political acumen, especially given that they all come from industries based on care and wise caution.
But perhaps a more likely reason is that they no longer want to bet on a broken horse like DeSantis.
Both Griffin and Peterffy made their departure from him public, a move that will help them gain favor with whoever emerges from the Republican field. It’s a struggle to save face. To put it as a billionaire, you are overvalued in a stock and need to diversify. The public and loud renunciation also acts as an invitation to the other primary candidates: the money is there for the taking.
That may be especially true for Griffin, who booked the CNBC slot just as the national media was beginning to take off obituary Equivalents for the DeSantis campaign, which is following a pattern of terrible poll results. Peterffy also reportedly said the campaign’s lack of appeal was one of his reasons for jumping ship. In April, he told the Financial Times that DeSantis was “losing momentum.”
But no matter how they spin it, supporting DeSantis for something bigger than Florida was always going to be a bad financial strategy. A prudent investor would have recognized his fundamental flaw: his debt to Trump. Then they would have realized that DeSantis could never beat the former president because parricide is not a successful strategy.
The political calculation really is that simple, and it must be embarrassing for these so-called investors to suffer huge losses by overlooking it. They’re coping by trying to shift blame onto DeSantis’ strategy — as if it’s surprising to see extremism ahead of a Republican primary. It doesn’t take a billionaire not to buy this nonsense.