Donald Trump set for another $1.25bn Truth Social windfall

Donald Trump is on the cusp of a major financial bonus – at least on paper – as long as the share price of Trump Media & Technology Group doesn’t spectacularly fall by the end of trading today.

Trump is on track to receive another 36 million shares as the owner of his social media site Truth Social, worth around $1.25 billion at Monday’s price. The former president set for the “earnout shares” as long the trading price of Trump Media & Technology Group, the parent company of Truth Social, does not fall below $17.50. It is currently trading for around double that price.

Trump is the majority shareholder of Trump Media & Technology Group, holding 78.75 million shares. The 36 million shares extra shares would be on top of that.

This would make his total stake in Trump Media more than $4bn on paper when the earnout shares are added, according to CNBC. However, any shares that he owns are subject to a lock-up that prohibits him from selling them within the next six months.

Trump is currently in court for the ongoing hush money criminal trial. But he is also dealing with hefty monetary judgements against him as well as continued spending on his presidential campaign.

So far this year, Mr Trump has been ordered to pay out more than $500m by two separate New York judges in different court cases.

He was ordered to pay a $454m fine plus interest in a ruling that found him, his sons and his former Trump Organization associates guilty of misrepresenting assets, and was also ordered in a separate case to pay $83.3m in defamation damages to writer E Jean Carroll.

Donald Trump speaks to the media ahead of Monday’s opening statements in court for the hush money trial in New York City (Getty Images)
Donald Trump speaks to the media ahead of Monday’s opening statements in court for the hush money trial in New York City (Getty Images)

The board of Trump Media could decide to amend the lock-up provision, but no such actions have been taken to do so.

“With more than $200 million in the bank and zero debt, Trump Media is fulfilling all its obligations related to the merger and rapidly moving forward with its business plan,” a company spokesperson told CNBC when asked about the earnout shares.

Trump Media was trading at $35.50 per share when it closed Monday. The earnout is obtained on the condition that various benchmarks are hit 20 trading days in a row within a 30-trading-day period that began on 25 March.

As Tuesday is the 20th day, it is unlikely that the DJT ticker will fall below the benchmark by the end of the day.

Trump Media, has the authority to issue a total of 40 million earnout shares as part of the merger deals that combined the company with a publicly traded shell corporation, Digital World Acquisition Corp.

“Assuming the full issuance of the Earnout Shares, President Donald J. Trump will receive 36,000,000 Earnout Shares,” the company said in a securities filing.

The merged company started publicly trading under the DJT ticker on 26 March, opening with the price of around $70 per share.

That day, the price rose to a high of nearly $80, seeing the company earning market capitalisation of around $9bn for a time.

However, since that momentary peak, the share price of Trump Media has started to nosedive.

While stock prices made a jump upwards last week, the Trump Media was still trading on Monday at around 50 per cent lower than the price they opened with.