Former President Donald Trump is set to receive a significant bonus of 36 million shares of Trump Media, valued at over $1.25 billion, with the company’s share price hitting $35 per share. This bonus, known as an “earnout,” is contingent on the stock price reaching a benchmark minimum share price of $17.50 by the end of trading on Tuesday. With the 20th day of trading on Tuesday, it is highly unlikely that the share price will fall below this benchmark, allowing Trump to become eligible for the bonus. This would bring Trump’s total stake in Trump Media to over $4 billion on paper, at $35 per share.
The additional 36 million shares for Trump would be added to the 78.75 million shares he already owns, as the company’s majority shareholder. The merger deal between Trump Media and Digital World Acquisition Corp. allows for the potential issuance of up to 40 million earnout shares, with Trump receiving 36 million of them. It is suggested that some of the remaining shares may be issued to Trump Media’s executive officers as part of an incentive plan. Trump was present in a New York City courtroom on Monday for his criminal hush money trial, with court resuming on Tuesday for the presumptive Republican presidential nominee.
Trump Media, also known as Trump Media & Technology Group Corp., went public under the DJT ticker in March with an opening price of $70.90 per share, rising to nearly $80 that day. However, the stock price has since plummeted, falling nearly 68% from its opening price by mid-April. Despite last week’s increase in share price, Trump Media shares are still trading about 50% lower than their debut price, resulting in a loss of billions in market capitalization for the company. It remains to be seen how the issuance of the earnout shares to Trump will impact the company’s share price moving forward.
Any shares owned by Trump are currently subject to a lock-up provision preventing him from selling them for six months after the merger’s closing date. While Trump Media’s board has the authority to amend this provision, no steps have been taken to do so thus far. The company has confirmed that it is fulfilling its obligations related to the merger, with over $200 million in the bank and no debt. This allows Trump Media to progress with its business plan despite the fluctuations in its share price. The future implications of Trump’s increased stake in the company and the potential issuance of earnout shares on Trump Media’s performance and stock price remain uncertain.
