Former President Donald Trump has recently acquired an additional $1.8 billion worth of stock in the corporate owner of Truth Social. The Trump Media & Technology Group disclosed this windfall in a filing on Tuesday, revealing that Trump has been granted another 36 million shares in the company.
This bonus, referred to as 'earnout' shares, was triggered by the company's share price remaining above specific levels. The performance criteria were officially deemed satisfied on April 26, leading to Trump being issued the Earnout Shares.
At current prices, these new shares are valued at approximately $1.8 billion on paper, although the share price has exhibited significant volatility. Trump now holds a more dominant stake in Trump Media, amounting to 114.75 million shares, which represents 64.9% of the total outstanding.
According to SEC filings, the full earnout of 40 million shares to pre-merger shareholders would be paid if the company's dollar volume-weighted average price equaled or exceeded $17.50 for any 20 trading days within a 30-day trading period starting on March 25.
Despite fluctuations in the stock price, Trump Media's share price has not dropped below the $17.50 level during the specified timeframe. The earnout shares received by Trump are subject to lock-up restrictions, preventing insiders from selling or borrowing against their stock for several months.
Experts suggest that even if Trump were to bypass the lock-up agreement, selling his stake quickly could pose challenges without negatively impacting the stock price. As the chairman and primary user of Truth Social, Trump holds the largest share in the company.
Trump Media's share price has experienced significant turbulence, reaching a peak of $66 on March 27, dropping to a post-merger low of $22.84 on April 16, and subsequently rebounding to nearly $50.
Despite the fluctuations in Trump Media's stock price, it has not come close to breaching levels that would have jeopardized the earnout shares granted to Trump.
