Despite a significant decline in the stock value of Trump Media & Technology Group (TMTG), former President Donald Trump stands to receive a bonus worth $1.2 billion due to a price floor provision. Trump’s eligibility for this bonus was triggered as shares in his social media company remained above a predetermined threshold.
Under this “earn-out” windfall arrangement, Trump is set to acquire an additional 36 million shares in TMTG, the parent company of his Truth Social platform. This bonus elevates the theoretical value of his stake in the business to approximately $3.7 billion.
The conditions for Trump to receive the bonus stipulated that TMTG’s stock must trade above $17.50 per share for at least 20 days within any 30-day period during the initial three years following the firm’s stock market debut. This milestone was attained when the stock closed at $32.57 on Tuesday.
Trump’s holdings in his social media venture have provided him with a financial cushion amid mounting legal liabilities totalling approximately $500 million stemming from civil fraud, defamation, and sexual abuse lawsuits. Although he is unable to divest his shares until September due to the terms of a lockup agreement, the fluctuating value of these shares has, at times, placed him among the wealthiest individuals globally on paper.
Following a dramatic debut on the Nasdaq stock exchange in New York, Trump’s social media enterprise, traded under the symbol DJT, has experienced a significant decline in value. While the stock surged to nearly $80 on its inaugural trading day, it has since witnessed fluctuations and downward trends in subsequent weeks.
Devin Nunes, the CEO of Trump Media, has hinted at the possibility of short sellers, who speculate on declining stock prices, potentially influencing the stock’s volatility and value through manipulation.
Last week, Trump Media shares suffered another blow, plunging by 12% following the company’s disclosure of its potential plans to sell millions of additional shares in the upcoming months. On Tuesday, the shares tumbled by an additional 8%, despite their role in enabling Trump to meet the criteria for his earn-out shares.
The company has also come under political scrutiny regarding its financial backers. Earlier this month, a Democratic-aligned group called for lawmakers to investigate the firm amidst allegations of influence peddling. This call for scrutiny arose after reports from The Guardian suggested that a Russian-American businessman, who is under federal criminal investigation, played a role in propping up the company.
Since its launch in 2022, Truth Social has served as a personal platform for Trump to communicate with his supporters. Although its user base remains significantly smaller compared to more established social networks like X (formerly Twitter), the platform has surpassed other right-wing apps in terms of growth.
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