Donald Trump is expected to get a DJT earnout bonus worth $1.25 billion in Trump Media stock.

At lunchtime on Monday, shares of Trump Media, the company behind the Truth Social app, were trading at about $35.

TFD – Dive into the financial dynamics of Trump Media as it issues earnout shares to Donald Trump, revealing insights into stock price movements and strategic business advancements. Stay informed about the latest developments shaping Trump Media’s trajectory in the market.

Tuesday, an extra 36 million shares of Trump Media are expected to be awarded to former president Donald Trump. At Monday’s price, this represents a $1.25 billion “earnout” incentive.

The True Social app’s owner, Trump Media, was trading at about $35 per share at midday on Monday.

But in order for Trump to be eligible for the additional so-called earnout shares, the price must be twice as high as the $17.50 benchmark minimum share price, which the DJT ticker must reach by Tuesday’s close of business.

The earnout is only guaranteed if the benchmark is reached for 20 trading days out of a 30-day trading window that starts on March 25. It is quite improbable that DJT will drop below the benchmark price by the end of Tuesday, the twentieth day.

As of 12:17 p.m. ET, the share price of Trump Media was down roughly 1.8%.

As the company’s dominant shareholder, Trump would receive an additional 36 million shares on top of the 78.75 million shares he currently controls.

At $35 a share, Trump’s entire holding in Trump Media would be valued over $4 billion on paper when the earnout shares are added to his current stock.

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

President Donald J. Trump will earn 36,000,000 Earnout Shares, the business stated in a securities filing, “assuming the full issuance of the Earnout Shares.” According to the filing, a portion, if not all, of the remaining shares will be awarded as part of an incentive plan to the executives of Trump Media.

On Monday, Trump attended the opening arguments in his criminal hush money trial in a New York City courtroom. Tuesday is the anticipated Republican presidential nominee’s court date.

Trump Media & Technology Group Corp., the combined company’s full name, went public on March 26 and was initially trading under the DJT ticker at $70.90 per share.

That day, the price reached a high of around $80, momentarily giving the business a market valuation of more than $9 billion. This was the case even though the company only recorded $4.1 million in revenue and a $58 million net deficit for 2023.

However, Trump Media’s stock price has dropped since then. The share price had dropped from its opening price by around 68% by the time trading ended on April 15.

The price of the shares increased last week. However, as of Monday, the price at which Trump Media shares were trading was still about 50% less than what it was when it first launched last month, wiping off billions of dollars from the company’s market capitalization.

Trump is practically guaranteed to get all of his earnout shares, even at a considerably lower stock price.

This is due to the fact that $17.50 was specified as the minimum share price at which Trump will receive all 36 million of his earnout shares. Before the Securities and Exchange Commission approved DWAC and Trump Media’s plans to consolidate, the shares last traded at that price in January.

It’s unclear how Trump Media’s share price will be impacted by the issuance of the earnout shares to him.

There is a lock-up clause preventing Trump from selling any shares he owns during the six months following the merger’s completion date.

Although the board of Trump Media has the authority to change that clause, it hasn’t done so as of yet.

A corporate representative was questioned by CNBC regarding the anticipated activation of Trump’s earnout shares.

She retorted, “Trump Media is meeting all of its merger-related obligations and rapidly advancing with its business plan. It has more than $200 million in the bank and zero debt.”