How Trump Made Billions By Not Selling His Truth Social Stock

Forbes

Call it the art of no deal. Trump Media & Technology Group’s biggest individual shareholder got richer by not cashing in his shares when his lock-up expired.  Read the full story on Forbes: https://www.forbes.com/sites/zacheverson/2024/10/18/donald-trump-truth-social-stock-trump-media-sell-lookup-worth/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  0:00 Introduction 1:14 The Fluctuations In Revenue From Truth Social 4:47 The Most Recent Share Price Of Truth Social Stock 5:57 The Value Of Truth Social Company  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Hi, everybody. I'm Brittany Lewis, a reporter here at Forbes. Joining me now is my Forbes

00:07colleague, staff writer Zach Everson. Zach, thanks so much for coming on.

00:11Thanks for having me again, Brittany.

00:13Zach, you found out how much former President Donald Trump has made by not selling his Truth

00:18Social stock. But first, bring us back to pre-March of 2024, before Truth Social completed

00:24its merger to go public. There were a lot of hiccups along the way, so remind us.

00:30Sure. They had announced that they planned merging with Digital World Acquisition Corp.,

00:35which was a blank check company. And yeah, a lot of hiccups along the way. There were

00:41investigations for possible insider trading, which I guess I don't need to say possible

00:45anymore. They were sentenced last week. There were issues with the accountant that Trump

00:52Media hired. No problem of the companies, but it was not their responsibility, but certainly

00:58it didn't help. And there was also an investigation into whether or not Digital World and Trump

01:03Media had talked about merging before they were legally able to have such a conversation.

01:09And Digital World agreed to pay a fine to settle that allegation as well.

01:14So now let's talk numbers. How much has the value of Truth fluctuated since it went public

01:20in March of 2024 to now?

01:23So that first day it hit a high of $79.38. At the time, that meant that Donald Trump,

01:30who owned 57.3% of the company, was sitting on shares worth about $6.3 billion. It bottomed

01:36out in September where it fell to $11.75 in the middle of a trading day, which wiped $4.9

01:45billion off of his network from that high.

01:49But this was certainly a lot of money for him, but he couldn't sell those shares immediately

01:54because he was part of a lockup agreement. So can you give us the details into that agreement?

01:59Sure. So Trump and I believe it's eight other insiders at the company signed lockup agreements

02:06in which they promised not to sell the stock unless one of three things happened. One,

02:12six months passed since the merger went through. Two, there was a certain transaction where

02:18all sorts of any shareholder could turn in their stocks on liquidated, like if the company

02:22had a liquidation or its own merger, a subsequent merger. And three, it was depending on the

02:26stock price. There were a couple of different triggers in there. But if the stock price

02:31was above a certain amount, they could sell within around 150 days after the merger went

02:38through. And it looks like that is what ended up triggering Trump's selling or Trump's ability

02:43to sell his shares. He still hasn't sold any.

02:46And Trump had over 50 percent of the company's shares. So between when the company went public

02:52in March to now, has he acquired more?

02:55Yes. Yes, he did. He did not actually pay for them, which seems to be a trend for Donald

03:01Trump, requiring something he didn't necessarily pay for. But there was a trigger in there

03:06earlier that if the stock price stayed above a certain level, he would pick up another

03:11or I think it was 36 million shares. So he added to his total while he was still in this

03:16lockup period.

03:18So Donald Trump wasn't the only one who had a lockup agreement. You mentioned a few other

03:22of the employees did. Did anyone who had similar restrictions to Donald Trump sell their shares?

03:28Yes. So there are five people who sold their shares, according to filings with the Securities

03:33and Exchange Commission, one of them, Devin Nunes. And the reason they gave for selling

03:37their shares, none of them sold all of their shares. They were just partial sales. They

03:42said it was to cover tax withholding purposes. So the interesting thing was trying to figure

03:48out exactly when Trump's lockup period ended. Those folks all sold it in August 22nd. And

03:58it was widely reported that Trump wasn't able to sell it, including by us, until September

04:0120th.

04:02So it kind of depends how you read the sentence in there. It was really poorly worded from

04:08this former English major's standpoint, probably from a lawyer that probably left it. But it

04:13does stand to reason that if he had the same agreement that they did, he could have actually

04:18sold them in August. You know, we don't know that for sure. I reached out to the Trump

04:22media. They didn't respond to that question. But it seems like he could have possibly sold

04:27it there. Either way, August 22nd or September 20th, he has managed to hold on to them and

04:33done well by that.

04:35He has been doing well by that. So how much are shares worth now? Remind us of that number.

04:40And is there any indication of him planning to sell? Is there any writing on the wall?

04:45Has he commented? What do we know on that front?

04:48So as of Friday's close, shares were trading at twenty nine dollars and fifty eight cents.

04:53That valued his holdings at three point four billion dollars. So significantly more than

04:58if he had sold earlier. If you'd sold them, the other executives had his entire take would

05:03have been two point six billion dollars pre-tax. If you'd waited till September 19th, which

05:08was the calendar day plus 20 trading days after the merger, he would have taken home

05:13just one point seven billion dollars. He said he's holding it. He said he likes it and does

05:18not have any plans to trade it. We haven't seen anything that would make me think he's

05:22not sticking to that for the time being.

05:25What could he be using this money for? Because three point four billion is a tremendous amount

05:29of money. And we've talked about his legal woes before his trouble with the building

05:33on 40 Wall Street. What could he be using this for?

05:38Exactly those items. He could be he has about five hundred and seventy million dollars in

05:41legal liabilities in New York state. He could pay that off by selling some of these shares.

05:46He has mortgages at 40 Wall Street and Trump Tower that are around one hundred million

05:50dollar range. He could pay those off as well and still have a sizable chunk of change left

05:55over if he chose to do that.

05:57So let's say Trump does eventually decide to dump his shares. Does this render truth

06:02social worthless? What would that do to the value of the company?

06:07Well, obviously, supply and demand. You know, you would start to see a massive supply of

06:11shares if he did put some of them out there. So it would stand to reason that the stock

06:15price should go down. But it also should stand to reason that the stock price shouldn't be

06:19as high as it is right now, just based apparently on its financials. So who knows? You know,

06:23there may be a tick of uptick for MAGA supporters who are, you know, we need to buy these stocks

06:28right now to help out Donald Trump because, you know, the liberal Democrats are going

06:33after him and he has to pay this fine and all this stuff. So, you know, who knows?

06:38Well, certainly a lot to look out for. But per usual, Zach Everson, we are glad you were

06:42looking out for us. Thanks so much for your reporting.

06:46My pleasure. Thank you, Brittany.

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