Despite a staggering $4.5 billion plummet in market value for Trump Media & Technology Group Corp. shares within just weeks, former President Trump and his corporate insiders stand poised for a substantial special bonus. As per regulatory filings, insiders, led by Trump himself, are slated to receive 40 million new shares if the stock’s decline can be halted. Such earnouts, typical in deals involving SPACs, aim to reward initial investors but often dilute ordinary shareholders’ stakes through additional share issuance.
For Trump Media, maintaining a trading price above $17.50 for 20 days out of a 30-day period is essential to trigger the bonus. Despite a 59% drop from its peak, recent trading suggests this milestone could be reached as early as April 23. Even a further 46% decline wouldn’t jeopardize the potential $1.3 billion payout to Trump and co-founders.
However, the company’s erratic behavior defies conventional market norms, making predictions uncertain. With shares spiraling downward, the bonus’s value has plummeted, eroding billions from Trump’s stake.
While downside protection exists for insiders, the actual worth of their holdings remains volatile. The lockup period until September further complicates matters, delaying any potential sell-off. Liquidating substantial holdings could severely impact stock prices, yet even at reduced rates, Trump stands to profit handsomely.
The true value of Trump Media remains contentious, given its significant losses juxtaposed with modest revenue. Speculative trading reminiscent of meme stock frenzies further clouds the company’s outlook.
Beyond financial turmoil, legal battles loom for Trump, including disputes with co-founders and criminal prosecutions. Despite these challenges, investors keenly watch Trump’s ability to capitalize on his paper wealth and its implications for the company’s future.
