Former President Donald Trump will soon be eligible to sell shares in his social media company, Trump Media & Technology Group, which owns the conservative platform Truth Social. Trump’s ownership of about 60% of shares in the company has seen the stock trade on the Nasdaq under the ticker $DJT since going public in March through a reverse merger process. The lock-up period initiated at that time prohibits certain shareholders from selling their shares until a specific date, which could allow Trump to sell his shares starting on September 19 if the stock remains above $12 or by September 25 at the latest.
It is uncertain whether Trump will actually sell his shares when eligible, or how much of his stake he would unload. The company’s prospectus indicates that Trump, as a presidential candidate, may divest his interest in Truth Social after the lock-up period. However, a company spokesperson has stated that there is no indication that Trump intends to sell his stock at this time. Additionally, selling a significant portion of his shares may face challenges due to regulatory restrictions even after the lock-up period expires, as every stock transaction requires a buyer on the other side.
Despite the potential opportunity to sell, Trump Media’s share price has fallen significantly from its peak earlier this year, resulting in a loss of billions of dollars from Trump’s net worth. While currently valued at $3.8 billion, down from $8 billion in the spring, Forbes estimates Trump’s fortune at $2.3 billion before the launch of DJT. The declining stock price has been attributed to the approaching end of the lock-up period and Trump’s return to X, a rival social media platform formerly known as Twitter.
The market value of Trump Media has also decreased, with the company now valued at around $3.4 billion compared to a peak of nearly $10 billion in May. Despite this, experts believe the company may still be overvalued, especially considering its financial performance. With a $16 million loss on $837,000 in sales during the most recent quarter, the financial standing of Trump Media raises questions about its true value compared to other social media companies like Reddit, which has a market cap of $9.3 billion and reported a $10 million loss on $281 million in sales.
As the lock-up period expiration nears, uncertainties remain regarding Trump’s potential sale of shares in Trump Media. While the stock price decline has impacted Trump’s net worth, the company’s financial performance and market value raise concerns about its true valuation. With the deadline for Trump to potentially sell his shares rapidly approaching, the future of Trump Media and the decisions of its major shareholders, including the former president, continue to be closely watched by investors and industry experts alike.
