Former President Donald Trump is set to gain access to a substantial amount of money with the expiration of a lock-up period on his $2.3 billion stake in Trump Media & Technology Group, the owner of Truth Social, by September 25. This money could potentially assist with legal fees or be used for funding his presidential campaign. However, selling a large portion of Trump Media shares could significantly impact the stock price, which has already been plummeting.
Trump Media’s value has dropped by 70% since late March, and the company’s stock price has been on a downward trend. This decline has negatively impacted Trump’s net worth, as his stake in the company was valued at $6.2 billion in May. The lock-up period preventing Trump from selling his shares is expected to expire soon, potentially as early as September 20, if the stock price meets specific criteria.
The challenge for Trump lies in balancing the desire to access his financial stake with the risk of causing a loss of confidence in Trump Media by selling a significant portion of his shares. Selling a large amount of stock could lead investors to question the company’s stability and prompt others to follow suit, resulting in a further decline in the stock price. This situation is reminiscent of scenarios where major shareholders like Elon Musk or Mark Zuckerberg suddenly sold their stock.
Some insiders at Trump Media have already started selling their shares, contributing to the recent selloff in the stock price. There are political considerations for Trump as well, as selling a large quantity of shares and causing the stock price to drop could be perceived negatively by his supporters. Additionally, experts argue that Trump Media’s valuation does not align with its financial performance, making it challenging to justify the current stock price.
Despite the overvaluation of Trump Media, the company holds a significant amount of cash that could be utilized for business expansion, particularly in its streaming services. Once the lock-up period expires, Trump could potentially leverage his stake in the company to secure loans. While some banks may be hesitant to deal with Trump, wealthy supporters could provide financial backing. This strategy would allow Trump to access his Truth Social fortune without selling a substantial amount of shares, although it may not require public disclosure.
