Former President Donald Trump’s $4 billion stake in Trump Media & Technology Group has been transferred to a revocable trust, causing a ripple effect in the stock market.
At a Glance
- Trump transferred nearly 115 million shares, valued at $4 billion, to the Donald J. Trump Revocable Trust
- Donald Trump Jr. is the sole trustee with voting and investment power
- The stock fell about 2% following the transfer announcement
- Experts view the move as a common estate planning strategy
- The transfer raises questions about the stock’s future performance
Trump’s Billion-Dollar Move
In a significant financial maneuver, former President Donald Trump has transferred his substantial stake in Trump Media & Technology Group (TMTG), the parent company of Truth Social, to a revocable trust. This transfer, involving nearly 115 million shares valued at approximately $4 billion, represents 53% of the company’s stock. The move has prompted immediate reactions in the stock market and raised questions about the future of TMTG.
Following the announcement, TMTG shares experienced a notable decline. By midday trading, the stock had fallen about 2% to $34.68, after an initial drop of as much as 6%. This volatility is not unusual for TMTG, which has seen significant fluctuations since its trading debut in March, with prices ranging from highs near $80 to recent lows.
Trust Dynamics and Market Impact
The Donald J. Trump Revocable Trust, now holding the majority stake in TMTG, has Donald Trump Jr. as its sole trustee. This arrangement grants Trump Jr. voting and investment power over the trust’s securities, while former President Trump remains the sole beneficiary. The structure of this trust has drawn attention from financial experts and market observers.
The trust arrangement is seen as a strategic move to stabilize the stock by preventing a potential mass sell-off, particularly if Trump were to return to the presidency. It reflects a long-term vision for asset stability while raising questions about future maneuvering.
Estate Planning and Future Implications
Financial experts view this trust transfer as a common estate planning tactic. Kevin Thompson, a Financial Analyst, explained the rationale behind such moves: “This is a common estate planning move that helps avoid the probate process and ensures a successor trustee can manage the assets in case of incapacity. While trusts do provide some privacy benefits, in this case, privacy isn’t a major advantage given Trump’s status as a large shareholder. Under Section 13(d) of the Securities Exchange Act, large shareholders are required to publicly disclose their holdings, so privacy is not the reason for the move.”
Thompson further elaborated on the potential implications: “If something were to happen to him, the trust allows for the seamless transfer or dissolution of shares without delays or complications. However, the move raises questions for investors about whether it reflects a strategic decision or a signal regarding the stock’s future as we head into 2025.”
