Ed Lin

Investment and banking holding company Dominari Holdings announced on Feb. 11 that Donald Trump Jr. and Eric Trump, two sons of President Donald Trump, joined the company's board of advisors and invested in Dominari. A week later, Dominari said it formed a new company with the Trump brothers to build data centers.

Dominari shares have rocketed nearly 700% this year, with the Trump-related news offering a relatively mild bump. Dominari stock soared 529% to $6.16 from Dec. 31 through the close of Feb. 10, the day before the company announced the investment from the Trump brothers. The Trump bounce took shares to as high as $13.58 on Feb. 13. They have since slipped to a recent price of $7.83, representing a gain of 27% since the announcement.

Dominari said the Trump brothers both invested in the company's Feb. 11 private sale of 2,436,587 shares, each bundled with a Series A warrant and Series B warrant, and priced at $3.47 for each share bundled with two warrants. The company also sold 1,439,467 shares bundled with the two warrants at the same price through purchase agreements with other investors. Altogether, the offering was valued at about $13.5 million.

Each Series A warrant may be used immediately to acquire one Dominari share for $3.72 and expires in five years. Each Series B warrant is also exercisable immediately to acquire one Dominari share for $4.22 per share and also expires in five years.

Eric and Donald Trump Jr. didn't immediately respond to a request for comment made with the Trump Organization, the family firm that each serves as an executive vice president.

Eric and Donald Trump Jr. each filed Schedule 13G forms with the Securities and Exchange Commission on Feb. 24. Such forms are used to report ownership stakes of more than 5% in a publicly traded company. Each reported owning 966,138 Dominari shares, a 6.71% stake, as of Feb. 21. That excludes 432,276 shares issuable through warrants that "are not currently exercisable due to certain beneficial ownership limitations."

If Eric and Donald Trump Jr.'s 432,276 shares each were included in their stakes, each Trump brother would have a Dominari stake of about 10%. Owning a stake at or over that threshold would give them the same status as company insiders, which includes executives and directors. Although the Trump brothers are on Dominari's advisory board, that isn't the same level as the company's board of directors.

The ownership stake on a 13G form includes not only actual stock but also shares potentially issuable to the reporting person within the next 60 days through instruments including options and warrants. Because both series of warrants were immediately exercisable, their corresponding exercisable shares would usually be included in the beneficial stake, which totals 966,138 for each brother. Barron's calculates that adding the beneficial stake with the excluded shares, and then dividing the sum by three to show the original number of share-warrant bundles that were purchased, shows that each Trump brother may have purchased 466,138 Dominari shares and the accompanying warrants for a total of $1,617,500.

However, it isn't clear if all the shares were acquired in Dominari's private placement. The 13G form doesn't disclose how shares were acquired nor what the reporting person paid for them. The Trump brothers may have received a number of Dominari shares, or warrants, for their service as advisors.

Dominari didn't immediately respond to a request for comment on the Trump brothers' investment in the company.

On Feb. 18, Dominari announced the creation of American Data Centers, an independent company, whose members include Dominari, Eric and Donald J. Trump Jr., and "other industry professionals" in artificial intelligence. ADC will "address the growing demand for high-performance computing infrastructure," and Dominari currently holds a 32% stake in it. "[W]e aim to build a robust portfolio of cutting-edge, energy-efficient data centers strategically located in key markets across the U.S.," Dominari President Kyle Wool said in the press release.

Inside Scoop is a regular Barron's feature covering stock transactions by corporate executives and board members -- so-called insiders -- as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Ed Lin at ed.lin@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 28, 2025 13:11 ET (18:11 GMT)

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