As drones emerge as a key weapon in the Iran war that began with U.S. and Israeli airstrikes, controversy over another "conflict of interest" has erupted as the two sons of U.S. President Donald Trump moved to invest in drone companies.
On the 9th (local time), the Wall Street Journal (WSJ) reported that Power RUS, a drone company headquartered in West Palm Beach, Florida, plans to list on Nasdaq through a merger with Aureus Greenway Holdings (AGH), a Nasdaq-listed golf course holding company invested in by the Trump family.
Investors in this transaction include American Ventures, the Trump family's investment firm, and Unusual Machines (UMAC), a drone parts company where Trump's eldest son, Trump Jr., is a shareholder and adviser. Power RUS is also a client of UMAC.
The Financial Times (FT) reported that Dominari Securities, an investment bank backed by Trump's two sons and headquartered in Trump Tower in New York, will handle private placements and other listing arrangements. Trump's two sons are effectively deeply involved throughout Power RUS's merger and listing process.
This transaction is drawing particular attention because the U.S. Department of Defense is in the midst of a "drone superiority program" to procure hundreds of thousands of U.S.-made drones by next year with an investment of $1.1 billion (about 1.6 trillion won). In addition, with the Federal Communications Commission (FCC) banning imports of new models of Chinese-made drones, the likelihood that U.S. drone makers will benefit has grown.
Moreover, as low-cost drones play a prominent role in the war between the United States and Israel on one side and Iran on the other, drones are becoming core weapons for many countries. FT noted, "The Trump family's investment in a drone manufacturer came just a week after the United States and Israel attacked Iran," adding, "Unusual Machines' share price has risen more than 20% since the war broke out."
Power RUS, which sells aerial and maritime drones, aims to produce more than 10,000 drones a month. That is more than other drone manufacturers in the United States. Power RUS is also reportedly pursuing the acquisition of a Ukrainian drone company or a technology licensing agreement.
The Trump family's drone investments have continued recently. Earlier, Trump's second son, Eric Trump, also invested in Israeli drone maker XTEND. XTEND is one of the military drone companies participating in U.S. Department of Defense procurement and is seeking a Nasdaq listing through a merger with JFB Construction, a small Florida-based construction company.
The Trump family has faced conflict-of-interest criticism as it continued investments closely tied to U.S. domestic and foreign policy after President Trump won reelection. Recently, as Netflix jumped into the bidding war to acquire Warner Bros., it also emerged that President Trump purchased company bonds of Netflix and Warner Bros. worth millions of dollars.