Trump Media Shares Fall as Lock-Up Restrictions Near Expiration

Shares of Donald Trump’s media company, Trump Media & Technology Group $DJT, fell for a second consecutive session on Tuesday, continuing to slide ahead of the end of restrictions on share sales by Trump and other insiders. TMTG, which owns the Truth Social app, saw its stock drop by 3.7%, bringing its total loss this week to 7%.

This fall comes ahead of the expiration of lock-up restrictions, a period where insiders, such as Trump and company investors, are prohibited from selling their shares. $DJT stock had previously jumped 12% last Friday after Trump announced that he does not plan to sell his $1.9 billion stake in the company. This announcement briefly reversed several weeks of steady stock losses, which had been driven by concerns over the impending end of insider trading restrictions since its March stock market debut.

Lock-up restrictions often lead to downward pressure on newly listed companies’ stocks due to expectations that insiders may sell a significant portion of their shares, leading to an excess in market supply. $DJT, once valued at nearly $10 billion after its public listing, is now down by about 75%, with shares priced at $16.64 on Tuesday. The company’s market capitalization currently stands at $3.3 billion, a sharp decline from its peak.

Among the insiders who will be eligible to sell shares are United Atlantic Ventures and Patrick Orlando, the latter of whom sponsored the blank-check company that merged with $DJT. Combined, they own 11% of the company. Additionally, Trump himself owns 57% of $DJT.

The company’s financial struggles are evident as well. While Trump is currently restricted from selling any of his shares for at least six months, the merger is expected to provide necessary funds to help the Truth Social platform expand further.

If $DJT stock remains at or above $12 by Thursday, insiders, including Trump, will be allowed to begin selling their shares on Friday. If not, they will become eligible to sell starting on September 26.

This recent slide in stock value is also influenced by the 2024 presidential election campaign, where Trump lost his lead in polls following President Joe Biden’s withdrawal from the race.

Inputs from Reuters

Update

Shares of Trump Media & Technology Group dropped by 4.5% during premarket trading on Friday, continuing the sharp decline from earlier this week after the expiration of the lock-up period for insider sales.

The $2.9 billion company, of which U.S. Republican candidate Donald Trump owns 57%, has seen its stock price fall by around 18% over the past four consecutive sessions, with an overall drop of approximately 80% from its peak in April.

Despite Trump’s announcement last week that he does not intend to sell his shares, valued at $1.6 billion, attention has shifted to other key shareholders who may decide to offload their shares.

Update

Trump Media and Technology Group Corp, the investment entity for Trump’s media endeavors, has seen two co-founders sold 7.53 million shares valued at around $100 million. Nevertheless, Trump has shown no intention of selling his majority stake in the company.

Update (October 4th, 2024)

The chief operating officer of Truth Social’s parent company has resigned, and the company must give nearly 800,000 shares to one of its investors due to a court ruling, as stated in a regulatory filing. Andrew Northwall, the COO, resigned from Trump Media & Technology Group Corp. at the end of last month, according to the Securities and Exchange Commission (SEC) filing. The company plans to handle his responsibilities internally, but no more details about his resignation were shared. He started working there in December 2021, based on his LinkedIn profile.

The SEC filing also revealed that a Delaware court decided last month that 785,825 shares of Trump Media must be given to ARC Global Investments II. The two parties have been in disagreement about the number of shares ARC was supposed to receive after Trump Media merged with Digital World Acquisition Corp. The court stated that both ARC and Trump Media can appeal the decision within 30 days of the final order.

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