Former President\u00a0Donald Trump\u00a0is poised to receive an additional 36 million shares of\u00a0Trump Media\u00a0Tuesday \u2014 an \u201cearnout\u201d bonus worth more than $1.25 billion, at Monday\u2019s price.<\/p>\n
Trump Media, which owns the\u00a0Truth Social\u00a0app, was trading at around $35 per share mid-day Monday.<\/p>\n
But that price is twice the $17.50 benchmark minimum share price, which the\u00a0DJT\u00a0ticker has to hit by the close of trading Tuesday, for Trump to become eligible for the extra so-called\u00a0earnout shares.<\/p>\n
That earnout is contingent on the benchmark being hit for 20 trading days within a 30-trading day period, beginning March 25. Tuesday is the 20th day and it is very unlikely that DJT will fall below the benchmark price by the end of that day.<\/p>\n
Trump Media\u2019s share price was down about 1.8% as of 12:17 p.m. ET<\/p>\n
The 36 million additional for Trump would be added to the 78.75 million shares he already owns, as the company\u2019s majority shareholder.<\/p>\n
When the earnout shares are added to his existing stock, Trump\u2019s total stake in Trump Media would be worth more than $4 billion on paper, at $35 a share.<\/p>\n
Trump\u00a0Media has the power to issue a total of 40 million earnout shares, as part of the merger deal that combined it with a publicly traded shell company, Digital World Acquisition Corp.<\/p>\n
\u201cAssuming the full issuance of the Earnout Shares, President Donald J.\u00a0Trump\u00a0will receive 36,000,000 Earnout Shares,\u201d the company said in a securities filing.\u00a0The filing suggests that some, if not all, of the remaining shares will be issued to\u00a0Trump\u00a0Media\u2019s executive officers as part of an incentive plan.<\/p>\n
Trump was in a New York City courtroom Monday, listening to opening statements in his criminal hush money trial. Court resumes on Tuesday for the presumptive Republican presidential nominee.<\/p>\n
The merged company, whose full name is Trump Media & Technology Group Corp., began public trading under the DJT ticker on March 26, at an opening price of $70.90 per share.<\/p>\n
That price rose to a high of nearly $80 that day, briefly giving the company a market capitalization of more than $9 billion. This was despite having reported a 2023 net loss of $58 million, and just $4.1 million in revenue.<\/p>\n
But since then, Trump Media\u2019s share price has plunged. By the close of trading on April 15, the share price had fallen nearly 68% from its opening price.<\/p>\n
The stock price rose sharply last week. But as of Monday, Trump Media shares were still trading around 50% lower than the price they debuted at last month, erasing billions of dollars in market capitalization for the company.<\/p>\n
Even with a much lower stock price, Trump is almost certain to receive all of his earnout shares.<\/p>\n
That\u2019s because the threshold share price at which Trump will receive all 36 million of his earnout shares was set at $17.50. The last time the stock traded at that price was in January, before the Securities and Exchange Commission greenlighted DWAC and Trump Media\u2019s plans to merge.<\/p>\n
It remains to be seen if the issuance of the earnout shares to Trump will affect the share price of Trump Media.<\/p>\n
Any shares that Trump owns are subject to a lock-up provision that prevents him from selling them in the six months following the merger\u2019s closing date.<\/p>\n
While Trump Media\u2019s board could amend that provision, to date, it has not taken any steps to do so.<\/p>\n
CNBC asked a company spokeswoman about the expected triggering of\u00a0Trump\u2019s earnout shares.<\/p>\n
She replied, \u201cWith more than $200 million in the bank and zero debt,\u00a0Trump\u00a0Media is fulfilling all its obligations related to the merger and rapidly moving forward with its business plan.\u201d<\/p>\n<\/p>\n
Former President\u00a0Donald Trump\u00a0is poised to receive an additional 36 million shares of\u00a0Trump Media\u00a0Tuesday \u2014 an \u201cearnout\u201d bonus worth more than $1.25 billion, at Monday\u2019s price. Trump Media, which owns the\u00a0Truth Social\u00a0app, was trading at around $35 per share mid-day Monday. But that price is twice the $17.50 benchmark minimum share price, which the\u00a0DJT\u00a0ticker has to […]<\/p>\n","protected":false},"author":0,"featured_media":3476,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-3475","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=3475"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3475\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/3476"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=3475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=3475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=3475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}