Former President Donald Trump is set to receive up to 36 million additional shares of Trump Media, worth a staggering $1.17 billion. This windfall is part of an earnout bonus provision in the merger agreement with Digital World Acquisition Corp. The condition for Trump to receive these shares is that the stock price must stay above certain thresholds for 20 days out of any 30 trading days.
Background
Trump founded Truth Social, his social media company, in 2021 after being banned from other major platforms following the January 6 riots at the U.S. Capitol.
Truth Social went public on the Nasdaq on March 26, 2024, through a merger with shell company Digital World Acquisition Corp., a special purpose acquisition company (SPAC).
Stock Price Fluctuations
On its debut day, Truth Social’s stock opened at $70.90 and soared as high as $79.38, driven by Trump’s loyal supporters.
However, the price faded later, and the stock closed at $48.66 on April 29, 2024, down 21.5% from its peak.Despite the volatility, the stock has consistently stayed above the $17.50 per share threshold required for Trump’s additional shares.
Financial Challenges
Regulatory filings reveal that Truth Social operated at a loss in 2023, making approximately $4 million in revenue while losing over $58 million.
Accounting firm BF Borgers CPA PC expressed doubts about the company’s ability to continue as a going concern due to the operating losses.
Trump’s Legal Battles
Trump’s wealth has surged due to the stock gains, even as he faces trial in Manhattan for 34 counts of falsifying business records.
In summary, Trump’s stake in Truth Social’s parent company, which now trades under the ticker DJT, is worth about $4.5 billion on paper. If the stock price remains above $17.50 per share, additional shares will be issued, most of them to Trump. Despite the challenges, the stock’s price remains volatile, and experts expect continued fluctuations.