Donald Trump is going to be about $1.2 billion richer.
The former US president will receive a so-called earnings bonus at his new public company, Trump Media & Technology Group, which was part of the company’s incentive initial public offering in March. Regulatory filings.
For Trump to acquire additional shares above the current 57% stake of 78 million shares, Trump Media would need to trade at $17.50 per share on any 20 trading days within a 30-day period. The stock trades under Trump’s initials DJT and Tuesday marks its 20th trading day, meaning the stock is eligible for the Trump bonus as it hasn’t fallen below $17.50 today.
Based on today’s closing price of $32.56 per share, Trump’s earnings are worth $1.2 billion.
Still, Trump couldn’t immediately cash in on the new shares. He and other Trump media executives said the sale was largely limited to their shares lasting about five months. Such lock-up periods are common among newly public companies because they prevent insiders from selling shares immediately after the company goes public, which can destabilize the stock and reduce its value.
With additional earnings shares, Trump will own about 115 million DJT shares, with a paper value of $3.7 billion. The debacle comes as Trump faces legal rulings and mounting financial pressure. Ongoing legal expenses.
Trump Media, whose main asset is social media platform Truth Social, has had a bumpy ride since its shares began trading last month. The stock initially rose, reaching $79.38 per share on its first day of trading on March 26, before enduring a week-long decline that prompted CEO Devin Nunes Some investors are to blame Stock manipulation through illegal short selling.
At current prices, Trump Media is worth about half of its peak value.
Trump has a small investor base
Many Trump media shareholders are private investors and supporters of the former president. Nunes told Fox Business that about 600,000 retail investors bought shares in Trump Media, calling it “the most amazing part of our company.”
“We have no institutions and Wall Street has zero money,” Nunes also said in the biggest news story of the past week.
Trump explained to the media on Tuesday that it tells shareholders how to protect their shares from being used for “short selling,” or when investors bet that a stock will fall. Typically, short sellers borrow shares that they believe will lose value and then immediately sell the shares in the market for cash. Then, if the stock price falls, the trader buys the stock at a lower price and returns the stock to the trading firm from which it was borrowed.
Trump Media said in a statement Tuesday that while short sales are legal, it wants to advise “long-term shareholders who believe in the company’s future” on how to prevent their shares from being used in such trades. This includes opting out of securities lending programs that allow brokers to lend shares and ensuring that shares are not held in margin accounts.
The company’s Trump fan base and its stock market volatility have prompted comparisons “Mem” stock such as Game Station. Such stocks often attract individual investors based on social media buzz, rather than the traditional financial metrics investors favor, such as revenue and profit growth.
Amy Peach
Aimee Picchi is a deputy managing editor at CBS MoneyWatch, covering business and personal finance. He previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
