Insiders at Donald Trump’s social media platform, Truth Social, are starting to offload their shares, while the former president is still waiting to capitalize on his stake. Executives at the platform have begun selling their shares, which began trading on NASDAQ following its merger with Digital World Acquisition Corp. in late March. Despite an initial valuation exceeding $3.8 billion and a share price of $57.99, the company’s stock has plummeted to $19.60.
Trump currently owns over 114 million shares in Trump Media, valued at approximately $2.5 billion. However, due to a lock-up period rule, he cannot sell his shares until September 25th. This rule is designed to prevent insiders from dumping shares immediately after a company goes public, potentially harming its stock price.
According to a Fortune report, other insiders, including Trump Media’s CFO Phillip Juhan and CEO Devin Nunes, have already begun selling their shares. This raises questions about the company’s financial health and future prospects.
Robert R. Johnson, a finance professor at Creighton University, points out that Truth Social’s stock price is significantly detached from the company’s financial reality. In the first quarter of 2024, the company reported a staggering $327 million loss on meager revenues of $770,500. This stark disparity between stock price and actual performance fuels concerns about the company’s long-term viability.
While Trump could potentially sell his shares by September 20th if the share price stabilizes, it’s unlikely he would sell his entire stake. This is due to the potential impact on the stock’s value and the fact that many of his political supporters are also shareholders. Any significant sell-off could negatively affect both the company’s stock price and Trump’s political standing.
The selling of shares by Truth Social executives highlights the company’s precarious situation. The stock’s dramatic decline and the substantial first-quarter loss expose a significant gap between financial reality and stock valuation. This discrepancy, coupled with the approaching end of Trump’s lock-up period, could potentially exacerbate instability in the company’s stock price. The situation is further complicated by the political implications, as many of Trump’s supporters are also shareholders. This creates a delicate balance for Trump, who must weigh his financial interests against the potential impact on his political base.
