Former President Donald Trump is rapidly approaching the date when he will be eligible to sell shares in his social media company, Trump Media & Technology Group, the parent company of the conservative platform Truth Social. Trump owns approximately 60% of all shares in the company, which trades on the Nasdaq stock exchange under the ticker $DJT, his initials. The company went public on March 26 through a reverse merger with a special-purpose acquisition company after a 29-month process filled with challenges like insider trading convictions and accounting errors.
After the company’s March debut, a lock-up period was initiated, preventing certain shareholders, such as those who own 5% or more of shares or hold high-level management positions, from selling shares until a specified date. Trump Media’s latest prospectus filing with the SEC outlines three scenarios that could trigger the conclusion of the lock-up period, including the end of the first six months of DJT stock trading as its own entity, Trump Media shares trading above $12 for a designated period, or a transaction like a merger. This means the earliest date Trump can sell is Sept. 19, if share prices remain above $12, while the latest date would be Sept. 25 at the end of the initial six-month listing period.
It remains unknown whether Trump will sell his shares when he becomes eligible or how much of his stake he would sell. The company’s prospectus states that Trump may divest his interest in Truth Social, potentially increasing volatility in the stock price. Trump Media spokesperson previously denied any indication that Trump plans to sell his stock. However, selling a significant portion of shares may present logistical challenges due to regulatory restrictions even after the lock-up period expires, and there needs to be someone on the other side of each trade.
Trump Media’s share price has decreased significantly, down roughly 80% from its March peak and 60% from its July high. As a result, billions of dollars have been wiped out from Trump’s net worth, which stood at $3.8 billion as of Friday, down from nearly $8 billion earlier in the year. Despite the decline, Trump is wealthier than he was before DJT’s debut, with a net worth estimated at $2.3 billion right before the launch. As Trump’s return to X, the rival social media platform that was previously known as Twitter, as the lock-up period nears its end, Trump Media’s market value was about $3.4 billion on Friday, a significant drop from a peak of nearly $10 billion in May.
Trump Media, which was previously viewed as a proxy for Trump’s presidential election odds, has seen a steady decline in its stock price leading up to the end of the lock-up period. The company’s market value has decreased significantly, now standing at $3.4 billion on Friday, down from its peak of nearly $10 billion in May. Despite this, experts suggest that the company may still be overvalued, considering it reported a $16 million loss on $837,000 in sales in its most recent quarter. Comparatively, Reddit, another social media company that went public in March, has a market capitalization of $9.3 billion and reported a $10 million quarterly loss on $281 million in sales.
