Stocks

Earnout Bonus for Former President Trump:

Former President Donald Trump stands to receive an additional 36 million shares of Trump Media, valued at over $1.25 billion, as an earnout bonus after trading concludes on Tuesday.

Eligibility Criteria and Benchmark:

Trump Media, owner of the Truth Social app, allocated these earnout shares based on the company's stock meeting a minimum share price benchmark. The closing price must exceed $17.50 for 20 trading days within a 30-day period, starting March 25.

Potential Share Allocation:

If the benchmark is met, the 36 million earnout shares would be added to Trump's existing 78.75 million shares, making him the majority shareholder of Trump Media.

Financial Implications:

With the earnout shares, Trump's total stake in Trump Media would surpass $4 billion, assuming a share price of $35.

Earnout Share Issuance:

Trump Media has the authority to issue up to 40 million earnout shares as part of the merger deal with Digital World Acquisition Corp. The company indicated in a securities filing that any remaining shares might be distributed to its executive officers.

Legal Proceedings and Trading Dynamics:

Trump's potential receipt of the earnout shares coincides with his participation in a criminal trial related to hush money payments. Meanwhile, Trump Media's stock, trading under the DJT ticker, has experienced significant volatility since its debut.

Market Performance and Share Price Fluctuations:

Despite an initial surge in stock price following public trading, Trump Media's shares have declined substantially, resulting in substantial market capitalization losses for the company.

Lock-Up Provision and Future Implications:

Shares acquired by Trump are subject to a six-month lock-up period, preventing immediate sale. The potential issuance of earnout shares may influence Trump Media's share price, but the company has yet to amend its lock-up provision.

Company's Response:

Trump Media, with a robust financial position, affirmed its commitment to fulfilling merger obligations and advancing its business agenda, emphasizing its substantial cash reserves and absence of debt.