The Trump Media & Technology Group Corp. has experienced a bumpy beginning in the stock market, with shares losing $4.5 billion in value over a short period. Despite this setback, it will take more than just this loss to jeopardize the substantial special bonus set to be awarded to former President Donald Trump and other corporate insiders. In accordance with the terms of the company’s blank-check deal, Trump Media insiders, including Trump himself as the largest shareholder, stand to receive 40 million new shares if the stock can recover from its recent decline.
Earnouts, a common feature in deals involving special purpose acquisition companies (SPACs), serve to incentivize and reward initial investors while also potentially diluting the value of existing shareholders’ stakes through the issuance of additional shares. In this case, the earnouts offer a significant reward to Trump Media insiders if the stock price can rebound. However, this dynamic raises concerns among ordinary shareholders who may see their ownership stakes diminished as a result of the issuance of millions of extra shares. The looming bonus for Trump and his corporate associates underscores the high stakes involved in the performance of Trump Media & Technology Group Corp. in the market.
