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Donald Trump could soon sell his Trump Media shares, potentially netting him a huge payout.
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The lock-up period for Trump Media shares ends on September 25, or earlier if certain conditions are met.
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Trump’s stake in Trump Media is worth approximately $2 billion, more than half of his total wealth.
Donald Trump will be eligible for a huge payout in a few days.
The potential source of the wealth is Republican presidential candidate Trump Media, which owns his platform, Truth Social. The entity first began trading on the Nasdaq in March under the ticker DJT.
As part of a “lockup agreement” common in initial public offerings, Trump is not allowed to sell his shares in the company for 180 days.
The countdown clock is now ticking.
The lock-up period is expected to end on September 25, as explained in the company’s filings. However, if certain conditions are met, it could also end as early as September 20.
To be released on the earlier date, the stock must remain above $12 for 20 trading days within the 30-day period that began Aug. 23. Despite the stock falling to around $16 last week — its all-time low — that requirement has been met. Shares have fallen 60% since mid-July.
Trump owns nearly 60% of the company and given that the company’s current valuation is around $3.3 billion, his stake totals about $2 billion.
According to Forbes, his stake in the company is worth more than half of his total wealth. According to Forbes, Trump is worth about $3.7 billion.
It is unclear whether Trump plans to sell his shares or not. In an SEC document, Trump Media explains that if a major shareholder even indicates that he plans to sell his shares, it could have a negative effect on stock prices.
“These sales, or the perception in the market that holders of a large number of shares intend to sell their shares, could reduce the market price of the shares,” the document said.
There’s also the issue of Trump not wanting to cash in on his holdings with DJT stock at record lows. In recent months, the stock has correlated with Trump’s poll numbers, so any recovery in election odds could lead to a stock rebound — and a more attractive payout package.
And on Friday, Trump insisted he wouldn’t sell.
“No, I’m not selling. No, I love it,” Trump said at a news conference in California, sending stocks soaring.
Still, Trump could probably use the money right now.
Earlier this year, Judge Arthur Engoron Trump and executives at the Trump Organization ordered to pay out $454 million plus interest in their New York civil fraud case. So far, Trump has paid $175 million in an appeal bond, but if he loses his appeal, he will have to pay hundreds of millions more.
In addition, Trump had already spent $100 million on legal fees as of March of this year, according to a report by The New York Times.
Trump Media has had a tumultuous ride since it went public. With the help of meme stock mania, the company’s stock price soared to $70 a share when it first went public, sending Trump Media’s market cap to $9 billion and the Republican nominee’s net worth to $7 billion.
The company boasted a staggering valuation despite meager profits and high expenses.
But Trump Media’s stock has been in free fall ever since. And even though Trump insisted he won the debate against Kamala Harris, the market reacted loudly as if he had lost, ultimately driving DJT’s latest leg to record lows.
Read the original article on Business Insider
