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Donald Trump is poised to be granted Trump Media stock worth $1.25 billion as part of the DJT earnout bonus
Earnout Bonus for Former President Trump:
Former President Donald Trump stands to receive an additional 36 million shares of Trump Media, valued at over $1.25 billion, as an earnout bonus after trading concludes on Tuesday.
Eligibility Criteria and Benchmark:
Trump Media, owner of the Truth Social app, allocated these earnout shares based on the company's stock meeting a minimum share price benchmark. The closing price must exceed $17.50 for 20 trading days within a 30-day period, starting March 25.
Potential Share Allocation:
If the benchmark is met, the 36 million earnout shares would be added to Trump's existing 78.75 million shares, making him the majority shareholder of Trump Media.
Financial Implications:
With the earnout shares, Trump's total stake in Trump Media would surpass $4 billion, assuming a share price of $35.
Earnout Share Issuance:
Trump Media has the authority to issue up to 40 million earnout shares as part of the merger deal with Digital World Acquisition Corp. The company indicated in a securities filing that any remaining shares might be distributed to its executive officers.
Legal Proceedings and Trading Dynamics:
Trump's potential receipt of the earnout shares coincides with his participation in a criminal trial related to hush money payments. Meanwhile, Trump Media's stock, trading under the DJT ticker, has experienced significant volatility since its debut.
Market Performance and Share Price Fluctuations:
Despite an initial surge in stock price following public trading, Trump Media's shares have declined substantially, resulting in substantial market capitalization losses for the company.
Lock-Up Provision and Future Implications:
Shares acquired by Trump are subject to a six-month lock-up period, preventing immediate sale. The potential issuance of earnout shares may influence Trump Media's share price, but the company has yet to amend its lock-up provision.
Company's Response:
Trump Media, with a robust financial position, affirmed its commitment to fulfilling merger obligations and advancing its business agenda, emphasizing its substantial cash reserves and absence of debt.
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