Trump set to get millions more shares from Trump Media

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Former President Donald Trump is set 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.

Trump Media, owner of the Truth Social app, closed Monday at $35.50 per share, down 2.42%, or about half the price at which the DJT ticker began trading on the stock exchange in late March.

But that closing price is still double the minimum benchmark price of $17.50 that Trump Media must reach by market close Tuesday for the former president to become eligible for additional so-called earnout shares.

This price complement is contingent on the benchmark being met for 20 trading days within a 30 trading day period, beginning on March 25. Tuesday is the 20th day and it is very unlikely that the DJT will fall below the reference price by the close of trading. .

The additional 36 million shares Trump appears to be seeking would add to the 78.75 million shares he already owns, as the company's majority shareholder.

When the earnout shares are added to his existing shares, Trump's total stake in Trump Media would be worth more than $4 billion on paper, at $35 per share.

TrumpMedia has the authority to issue a total of 40 million earnout shares, under the merger deal that combined it with a publicly traded shell company, Digital World Acquisition Corp.

“Assuming full issuance of the earnout shares, President Donald J. Trump will receive 36,000,000 earnout shares,” the company said in a securities filing. The filing suggests that some, if not all, of the remaining shares will be issued to TrumpMedia executives as part of an incentive plan.

Trump was in a New York City courtroom Monday, listening to opening statements in his quiet criminal trial. The trial resumes Tuesday for the presumptive Republican presidential candidate.

The combined company, whose full name is Trump Media & Technology Group Corp., began trading publicly under the symbol DJT on March 26, at an opening price of $70.90 per share.

That price reached a high of nearly $80 that day, briefly giving the company a market capitalization of more than $9 billion. This is despite a net loss of $58 million in 2023 and a turnover of only $4.1 million.

But since then, Trump Media's stock price has plunged. By the close of trading on April 15, the stock price had fallen nearly 68% from its opening price.

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The stock price rose sharply last week. But as of Monday, Trump Media shares were still trading about 50% below their initial price, wiping out billions of dollars in market capitalization for the company.

The last time the stock traded at the benchmark low price of $17.50 was in January, before the Securities and Exchange Commission cleared the proposed merger of DWAC and Trump Media.

It remains to be seen whether the issuance of the earnout shares to Trump will affect Trump Media's stock price.

All shares owned by Trump are subject to a lock-up clause that prevents him from selling them within six months of the merger's closing date.

Although the Trump Media board could change this provision, to date it has not taken any action to do so.

CNBC asked a company spokeswoman about the expected triggering of Trump's earnout actions.

She responded: “With over $200 million in the bank and zero debt, TrumpMedia is meeting all of its merger obligations and moving forward quickly with its business plan. »

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