Donald Trump is on the brink of a critical financial decision. In just a month, the former president will gain the ability to sell portions of his $2.6 billion stake in Trump Media & Technology Group Corp. (NYSE: DNAT), the company behind the social-media platform Truth Social. This pivotal moment comes as the lockup period, which has prevented insiders from selling shares, nears its end on September 20, 2024.
Trump, who controls approximately 60% of Trump Media, faces a complex situation. On one hand, liquidating shares could alleviate his substantial legal expenses, which include over half a billion dollars in penalties from recent lawsuits and ongoing legal challenges related to the 2020 election and hush money payments. On the other hand, selling shares might signal a lack of confidence in the company and could alienate supporters who view his financial moves through a political lens.
Since its public debut via a special-purpose acquisition company (SPAC) merger in March, Trump Media’s stock has experienced significant volatility. After reaching a high of $79.38, the stock has since plummeted to a recent low of $22.24, giving the company a market capitalization of $4.3 billion. This fluctuation reflects not only the broader market sentiment but also the speculative nature of the stock, which is heavily influenced by retail trading activity and bets on Trump’s political future.
Despite these swings, the company’s underlying financials remain troubling. Trump Media reported a $344 million loss in the first half of the year, driven primarily by paper losses on derivatives and minimal revenue of $1.6 million. These figures underscore the company’s ongoing struggle to translate its market presence into financial stability.
The timing of any potential sale by Trump and other insiders—such as co-founders Andy Litinsky and Wes Moss, and Patrick Orlando of ARC Global Investments—depends on the stock price. If shares stay above $12 for 20 trading days starting August 22, sales can begin on September 20. Otherwise, the lockup will expire on September 26 regardless of the stock’s performance.
Market observers are wary of the potential repercussions. “If Trump starts selling off his shares, it could significantly impact the stock price,” noted Matthew Tuttle, CEO of Tuttle Capital Management. “The decision will likely hinge on whether he urgently needs the funds or if he prioritizes maintaining stock value and investor confidence.”
The stock’s recent decline has also mirrored Trump’s slipping odds in the political arena. Betting markets, as tracked by PredictIt, show a decrease in Trump’s chances of winning the 2024 presidential race, which have dropped from 69% to 46% in the past month. The Democratic National Convention’s support for Vice President Kamala Harris has contributed to this shift.
Trump’s decision to sell the stake in Trump Media is fraught with implications for both his financial situation and political future. As he navigates these choices, the impact on the company’s stock price and his broader public image will be closely watched.
