Donald Trump is poised to receive a valuable stock bonus from Truth Social’s parent company, Trump Media & Technology Group (TMTG), as the firm’s shares continue to rise. The bonus, estimated at $1.3 billion, will significantly increase Trump’s stake in the company to a total of $4.1 billion. This windfall comes as TMTG’s shares have witnessed a remarkable surge in value, contributing to Trump’s growing wealth. Despite his commitment to retain all of his TMTG shares until September, Trump has benefited immensely from the stock’s performance, particularly in light of his mounting legal expenses and potential penalties. The stock bonus is structured as an earnout incentive, which is contingent upon TMTG’s shares trading above a certain threshold for a specified period. Trump’s eligibility for the full bonus is assured as TMTG’s shares have consistently surpassed the required price point since the company’s public listing last month. While TMTG’s valuation stands at an impressive $5 billion, it surpasses the company’s revenue by a substantial margin, raising concerns about its long-term viability. Despite these concerns, Trump is poised to reap the benefits of his stock bonus, which is a common practice in the SPAC merger context. However, the success of SPAC deals hinges on the performance of the acquired company’s stock, which can be unpredictable. TMTG’s case stands out due to its decoupled share performance from its underlying business prospects. Experts note that many SPAC earnout bonuses remain unfulfilled as stock prices often decline after merger completion. To mitigate this risk, TMTG amended its deal with Trump in August 2023, lowering the price threshold required for him to receive the full bonus. This adjustment played a crucial role in ensuring Trump would secure the substantial payout. The terms of the agreement grant Trump three years to qualify for the full earnout, providing him with ample time to meet the 20-day trading requirement above the threshold within any 30-day period.
Trump to Receive $1.3 Billion Stock Bonus from Truth Social Amidst Share Surge
