Former President Donald J. Trump’s significant stake in his social media company, Truth Social, is set to increase by over $1 billion due to the company’s high stock price. This windfall comes at a crucial time for Mr. Trump, who is facing substantial legal bills and is ramping up his political campaign. He currently holds 79 million shares in Trump Media & Technology Group, valued at nearly $3 billion, and is due an additional 36 million shares as part of an earnout, which would raise the value of his stake to over $4 billion.
Earnout shares are designed to reward insiders if a company’s stock performs well after a merger deal. Trump Media merged with a public shell company and made its debut on the Nasdaq in March. The new shares would increase Mr. Trump’s stake to approximately 65 percent of the company. While the share price initially surged to nearly $8 billion, it has since fluctuated and fallen by about half from its peak. Despite this, the share price has remained above levels that trigger the awarding of extra shares to Mr. Trump and other shareholders.
Mr. Trump is currently restricted from trading or using his stock as collateral. He must wait 150 days, or until late August, before he can sell any of his stake, unless the board waives the restrictions. The company recently filed to register millions of potential new shares, causing concern among investors due to the unusual ownership structure of Trump Media, which includes retail traders and supporters of Mr. Trump. If a large number of new shares were to enter the market, it could lead to further volatility in the stock price.
The boost to Mr. Trump’s net worth comes as he faces significant legal challenges and focuses on his political campaign. His image as a wealthy businessman is a key part of his appeal to voters, and the increase in his stake in Trump Media reinforces this narrative. Despite the fluctuations in the company’s stock price, Mr. Trump’s shares have remained above the thresholds set for awarding additional shares, indicating ongoing strong performance.
The rise in Mr. Trump’s stake in Trump Media comes at a time when the company’s stock price has been highly volatile and subject to manipulation by short-sellers. The earnout shares he is due are contingent on the stock trading above certain levels for a set period, which it has consistently done since the company’s debut on the Nasdaq. While the registration of new shares last week rattled investors, Mr. Trump’s ownership of a significant portion of the company could further impact the stock price if and when he is able to sell his shares.
In conclusion, Donald J. Trump’s stake in Trump Media & Technology Group is set to increase by over $1 billion, boosting his net worth and reinforcing his image as a successful businessman. The earnout shares he is due are a reward for the company’s stock performance since its merger and debut on the Nasdaq. Despite concerns about the company’s ownership structure and potential market impact of new shares, Mr. Trump’s significant stake in the company highlights his continued influence in the business and political spheres.
