Former President Donald Trump’s social media fortune is expected to increase with the recent conditions of the Truth Social merger, which will grant him millions more shares in the public company. Despite this, the questionable valuation of the firm raises doubts about how much of his stake he will actually be able to cash in on. After closing well above the $17.50 per share condition set out last week, Trump is likely to receive an additional 36 million shares as part of an earnout bonus, increasing his holdings in the company from 78.8 million shares to 114.8 million shares.
This increase in shares would boost Trump’s social media stake from $2.5 billion to $3.7 billion, potentially adding $1.2 billion to his net worth. However, this growth comes as Trump Media stock fell about 8% on Tuesday, sitting at 60% below its March peak, but still valuing the company at a significant $4.5 billion market capitalization. Despite the stock taking a hit on Tuesday, Trump’s existing holdings still saw a $900 million gain on paper.
According to Forbes calculations, Trump’s net worth was estimated at $4.4 billion at the end of Tuesday trading, factoring in his existing Truth Social shares, real estate, and other assets. With the additional award of shares, his fortune could potentially rise to around $5.5 billion, provided the social media stock price remains relatively stable. However, uncertainties remain about the true value of Trump’s earnout award, as it is dependent on the company’s valuation supporting a significant jump in shares outstanding without adversely affecting existing shareholders.
Significant questions still linger about the potential impact of the earnout award on Trump Media’s overall valuation, especially after the stock’s 18% loss following the announcement of the possible offering. The company’s valuation seems to be divorced from its fundamentals, leading to doubts about the true worth of the firm. Additionally, concerns arise regarding when and how Trump will be able to sell or dispose of his shares in Trump Media, given his majority shareholder status and the regulatory implications for stock sales.
Overall, Trump’s social media fortune is expected to increase significantly with the additional shares he is set to receive as part of the Truth Social merger. Despite the company’s fluctuating stock price and uncertain valuation, Trump’s net worth is likely to rise if the social media stock price remains steady. However, questions remain about the true value of Trump’s earnout award and the potential implications for Trump Media’s overall market value.
