A rocky start for Trump Media & Technology Group Corp. shares has wiped out $4.5 billion in market value in just a couple of weeks. But it will have to lose a lot more than that to put at risk the massive special bonus due to the former president and his corporate insiders.
As part of the startup’s blank-check deal, Trump Media insiders — Donald Trump himself is by far the largest holder — will divvy up 40 million new shares if the stock trades can stall their latest slide, regulatory filings show. The so-called earnouts, which can be a standard part of deals involving special purpose acquisition companies, or SPACs, are designed to reward the original investors, but they also punish ordinary shareholders by diluting the value of their stakes through the issuance of millions of extra shares.
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