Donald Trump is set to secure on Tuesday a stock bonus worth $1.3 billion from the company that operates his social media app Truth Social , equivalent to about half the majority stake he already owns in it, thanks to the wild rally in its shares.
Unlike much of his real estate empire, shares are easy to divest in the stock market and could come in handy as Trump’s legal fees and fines pile up, including a $454.2 million judgment in his New York civil fraud case he is appealing. TMTG’s current valuation of approximately $5 billion is equivalent to about 1,220 times the loss-making company’s revenue in 2023 of $4.1 million.
While Trump’s windfall is rich for a small, loss-making company like TMTG, the earnout structure that allows it is common. According to a report from law firm Freshfields Bruckhaus Deringer, stock earnouts for management were seen in more than half the SPAC mergers completed in 2022. To be sure, TMTG made it easier for Trump to meet the earnout threshold. When TMTG agreed to merge with the SPAC in October 2021, the deal envisioned that TMTG shares had to trade above $30 for Trump to get the full earnout bonus. The two sides amended the deal in August 2023 to lower that threshold to $17.50, regulatory filings show.
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