Former President Donald Trump stands on the brink of a monumental financial windfall, poised to reap a staggering $1.25 billion "earnout" bonus from his media enterprise following a remarkable surge in its stock price. Trump, holding a controlling interest in the Trump Media and Technology Group, is slated to garner an additional 36 million shares of the company as of Tuesday.
Monday's closing bell saw Trump Media's stock hovering around $35.50 per share—a resounding double the $17.50 benchmark minimum, the threshold requisite for Trump to qualify for the lucrative bonus. This financial coup entails Trump Media's stock reaching the benchmark for 20 trading days within a 30-day trading span commencing from March 25, the company's initial public offering. And now, on the 20th day—Tuesday—the fruits of this milestone are set to be reaped.
A securities filing referenced by CNBC divulged, "Assuming the full issuance of the Earnout Shares, President Donald J. Trump will receive 36,000,000 Earnout Shares." Trump Media, the umbrella entity encompassing his social media platform Truth Social, holds the authority to allocate up to 40 million earnout shares as part of its merger with the blank-check entity Digital World Acquisitions Corp. Notably, the filing intimates that some or all of the remaining shares could be disbursed to Trump Media executives as an integral facet of an incentive program.
A spokesperson for Trump Media elucidated, "With more than $200 million in the bank and zero debt, Trump Media is fulfilling all its obligations related to the merger and rapidly moving forward with its business plan," underscoring the company's robust financial footing.
For Trump, the timing couldn't be more propitious, as he navigates a tumultuous legal landscape. As the presumptive Republican nominee in the forthcoming presidential election, Trump already commands 78.75 million shares of Trump Media. With the additional earnout shares in his grasp, Trump's ownership would burgeon to encompass a commanding 65% of the total outstanding shares, as per SEC filings.
At $35 per share, Trump's stake in Trump Media commands an astronomical valuation, approximating a staggering $4 billion on paper. Nonetheless, a six-month lockout provision prevents Trump from accessing this considerable sum to assuage his substantial legal expenses. While the Trump-controlled company's board retains the authority to waive this provision, such a decision risks inciting apprehension among other investors, potentially precipitating a mass exodus.
Simultaneously, Trump finds himself entangled in legal imbroglios, including his ongoing "hush money" trial in a Manhattan courtroom. Compounding his legal woes, a New York State judge recently levied a formidable $454.2 million judgment against Trump, following a successful lawsuit by Attorney General Letitia James, alleging asset inflation by the former president's company.
Campaign finance disclosures divulge Trump's prodigious legal expenditures, with nearly $5 million disbursed to legal counsel in the past month alone. Bloomberg News reports a dwindling $6.8 million remaining in the accounts earmarked for legal expenses—a palpable reminder of the financial tightrope Trump currently navigates amidst mounting legal challenges.
Trump Media made its debut on the Nasdaq exchange with the ticker symbol "DJT" amidst a whirlwind of excitement, soaring to an impressive peak of nearly $80 per share on March 26. This meteoric rise briefly catapulted the company's market capitalization beyond the $9 billion mark, signaling a robust start for the media venture.
However, the euphoria of its initial trading frenzy was short-lived as Trump Media's share price has since undergone a significant correction. Plummeting by close to 70% from its record high just last month, the once lofty valuations have receded, painting a starkly different picture for the company on the stock market.
As Trump Media grapples with the stark realities of market volatility and investor sentiment, its tumultuous journey on the stock exchange underscores the unpredictable nature of the media landscape. While its initial ascent hinted at boundless potential, the subsequent downturn serves as a reminder of the challenges inherent in sustaining momentum in an ever-evolving industry. Moving forward, the company faces the daunting task of regaining investor confidence and charting a course towards long-term viability amidst fluctuating market conditions.
