Former President Donald Trump recently acquired $1.8 billion worth of stock in the corporate owner of Truth Social, Trump Media & Technology Group, bringing his total stake in the company to 64.9% of the total outstanding shares. This windfall of 36 million shares was triggered by the company’s stock price remaining above certain levels, leading to the issuance of “earnout” shares. The earnout criteria were officially met on April 26, resulting in Trump receiving the additional shares which are valued at approximately $1.8 billion on paper, although the share price has been volatile.
The earnout shares were part of a larger agreement that would reward pre-merger shareholders with 40 million shares if the company’s share price reached or exceeded $17.50 for 20 trading days within a 30-day period starting on March 25. The 20th trading day occurred on April 23 and the stock had consistently remained above the $17.50 threshold, leading to the issuance of the additional shares to Trump. These shares are subject to lock-up restrictions that prevent insiders, including Trump, from selling or leveraging their stock for a certain period of time, which could impact Trump’s ability to quickly sell his stake without affecting the stock price.
The fluctuating value of Trump’s stake in Trump Media has mirrored the volatile share price in recent weeks, affecting his overall net worth. Trump’s significant ownership in the company, combined with his position as chairman and leading user on Truth Social, further solidifies his influence within the organization. However, experts caution that selling such a large stake could prove challenging for Trump without negatively impacting the stock price. Despite the potential financial gain from his stake in Trump Media, the restrictions on selling and the potential market impact pose obstacles for Trump in leveraging his ownership.
As the largest shareholder in Trump Media, Trump’s ownership stake and involvement in the company raise questions about his intentions with the platform and the impact of his increased shareholding on the organization. The additional shares acquired by Trump further cement his control over the company and reinforce his position within the organization. However, the restrictions on selling and the potential market impact of a large sale could limit Trump’s ability to fully realize the financial value of his stake in the company in the near term. Trump’s ownership of a significant majority of the outstanding shares underscores his influence over Truth Social and raises questions about the future trajectory of the platform under his leadership.
The financial windfall from the additional shares received by Trump highlights the potential value of his ownership stake in Trump Media and solidifies his position as a major player in the company. However, the restrictions on selling and the potential market impact of a large sale present challenges for Trump in realizing the full financial benefits of his ownership. Trump’s ownership stake, combined with his leadership role and prominence on Truth Social, underscores his influence within the organization and raises questions about the future direction of the platform under his control. Despite the financial gain from the additional shares, the complexities of the stock restrictions and potential market impact pose obstacles for Trump in leveraging his ownership stake in the company.
