Former President Donald Trump is set to receive an additional $1.2 billion in shares of his social-media company, Trump Media & Technology Group, as a bonus based on the performance of the company’s stock. This bonus, known as an “earnout,” was triggered by the stock trading above $17.50 for 20 trading days. Trump is the majority shareholder of the company, with a stake of around 79 million shares before the bonus, which is now increased to 115 million shares, totaling about 65% of the company and worth over $4 billion as of the latest closing price.
Trump Media (DJT) went public on the Nasdaq in March through a SPAC merger, with shares initially trading as high as $80 before experiencing a significant drop due to market volatility. The stock has since recovered, trading in the $30 to $40 range, although it fell by 8% on Tuesday. Trump will not be able to sell any shares until at least 150 days after the company went public, unless approved by the board. Given the company’s close ties to Trump, selling a significant portion of his stake could lead to adverse effects on the stock price.
The financial windfall for Trump comes at a crucial time as he faces legal challenges and hefty financial obligations. The former president is currently in court for his hush-money trial and is already facing significant legal judgments and bills, including an $83 million defamation judgment and a $450 million civil-fraud lawsuit. Trump’s ability to access the funds from his shares will be a complex process, given his legal troubles and the company’s status as a “meme stock” not entirely governed by typical market fundamentals.
The Truth Social app, owned by Trump Media, is depicted on a smartphone, highlighting the former president’s potential earnings from the company’s stock performance. Despite the financial gains, Trump’s ability to sell his shares and access the funds remains uncertain, especially with looming legal issues and restrictions on stock sales. The company’s connection to Trump’s name and image further complicates the situation, as any large-scale sell-off by the former president could impact the stock price.
Overall, Trump’s net worth is set to increase significantly with the additional shares of Trump Media, although the timing and process for accessing these funds remain complex. The former president’s financial situation is intertwined with his ongoing legal battles and significant legal judgments, adding further complexity to his ability to capitalize on the company’s stock performance. Despite the potential windfall, Trump’s ability to maneuver within the financial and legal landscape will determine the extent to which he can benefit from his stake in Trump Media & Technology Group.
