Former President Donald Trump is poised to receive an additional 36 million shares of Trump Media on Tuesday — an “earnout” bonus worth more than $1.25 billion, at Monday’s price.
That earnout is contingent on the benchmark being hit for 20 trading days within a 30-trading-day period, beginning March 25.
The 36 million additional shares Trump seems set to get would be added to the 78.75 million shares he already owns, as the company’s majority shareholder.
When the earnout shares are added to his existing stock, Trump’s total stake in Trump Media would be worth more than $4 billion on paper, at $35 a share.
But since then, Trump Media’s share price has plunged.
By the close of trading on April 15, the share price had fallen nearly 68% from its opening price.
It remains to be seen if the issuance of the earnout shares to Trump will affect the share price of Trump Media.
CNBC asked a company spokeswoman about the expected triggering of Trump’s earnout shares.
On Tuesday, an “earnout” bonus valued at over $1.25 billion at Monday’s price will be given to former President Donald Trump in the form of 36 million more shares of Trump Media.
Half of the price at which the DJT ticker started public trading in late March was lost by 2 points42 percent on Monday, when Trump Media, the company behind the Truth Social app, ended trading at $35.50 per share.
However, in order for the former president to be qualified for the additional so-called earnout shares, Trump Media must reach a benchmark minimum share price of $17,750 by Tuesday’s close of business. This closing price is still twice that amount.
The earnout is subject to the benchmark being hit for 20 trading days out of a 30-day trading period starting on March 25. The twentieth day is Tuesday, and it is highly improbable that DJT will drop below the benchmark price by the end of trading on that day.
As the company’s majority shareholder, Trump currently owns 78,775 million shares, to which he would add the 36 million additional shares he appears set to acquire.
At $35 per share, Trump’s entire ownership stake in Trump Media would be valued over $4 billion on paper when the earnout shares are added to his current stock.
As part of the merger agreement that united it with a publicly traded shell company, Digital World Acquisition Corp., Trump Media has the authority to issue up to 40 million earnout shares in total.
“Presuming the Earnout Shares are fully issued, President Donald J. “The company announced in a securities filing that Trump will receive 36,000,000 Earnout Shares.”. According to the filing, the executive officers of Trump Media will receive some, if not all, of the remaining shares as part of an incentive program.
On Monday, Trump was present in a New York City courtroom to hear the opening arguments in his criminal hush money trial. For the presumed Republican presidential nominee, court is back in session on Tuesday.
Trump Media and Technology Group Corp. is the full name of the combined business. started trading publicly on March 26 at a price of $70.90 per share under the DJT ticker.
That day, the price surged to almost $80, briefly giving the business a market valuation of more than $9 billion. This was the case even though they only reported $4.1 million in revenue and a $58 million net loss for 2023.
However, Trump Media’s stock price has dropped since then. Almost 68 percent of the share price had been lost from its opening value by the time trading ended on April 15.
Last week, the price of the stock increased significantly. However, as of Monday, the market capitalization of Trump Media had erased billions of dollars as its shares were still trading at a 50% discount to their launch price.
Prior to the Securities and Exchange Commission approving DWAC and Trump Media’s merger plans, the stock last traded at the benchmark minimum share price of $17.50 in January.
Uncertainty surrounds whether Trump Media’s stock price will be impacted by the issuance of earnout shares to him.
A lock-up clause preventing Trump from selling any shares he owns within six months of the merger’s closing date pertains to those shares.
Although the board of Trump Media has the authority to change that clause, it hasn’t done so as of yet.
A company representative was questioned by CNBC regarding the anticipated activation of Trump’s earnout shares.
In response, she said, “Trump Media is quickly advancing its business plan and meeting all of its merger-related obligations, with over $200 million in the bank and no debt.”. “.
