Former President Donald Trump is potentially set to increase his social media fortune by $1.3 billion, as Trump Media may award him an additional 36 million shares if the company’s shares stay above $17.50. This bonus would increase his stake in the company from 78.8 million shares to 114.8 million shares, boosting his social media stake from $2.8 billion to $4.1 billion. Despite this potential windfall, shares of Trump Media fell about 2% on Monday, still valuing the company at a robust $4.9 billion market capitalization, 55% below their peak in March.
According to Forbes calculations, Trump’s net worth was $4.7 billion at the end of Monday, based on his existing Truth Social shares and other assets. If his fortune rises by the $1.3 billion bonus, his net worth would rise to $6 billion, potentially placing him on Forbes’ ranking of the 500 richest people in the world. However, questions remain about the true value of Trump’s earnout award, as creating equity out of thin air raises concerns about dilution and the company’s overall valuation. The stock’s 18% loss after the announcement of the possible offering adds further uncertainty, with questions about when Trump can sell his shares due to his majority shareholder status.
The valuation of Trump Media and Trump’s potential windfall raise significant doubts about the true value of the company and the feasibility of Trump cashing in on his stake. The current market capitalization of the company, at $4.9 billion, is still robust despite the recent drop in share prices. However, the disconnect between the company’s valuation and its fundamentals suggests that the true value of Trump Media may be significantly lower than its present market capitalization. The uncertainty around Trump’s ability to sell his shares further adds to the complexities surrounding his potential earnings.
As Trump potentially nears Forbes’ ranking of the 500 richest people in the world, questions about the true value of his social media fortune continue to linger. The stock price volatility of Trump Media, along with concerns about dilution and regulation around stock sales, suggest that Trump’s $1.3 billion windfall may not be as straightforward as it seems. The overall puzzling nature of the company’s valuation and Trump’s stake in it raise further doubts about the true value of his social media fortune and the feasibility of him cashing in on it in the future.
