Trump Media Hits New Low as Major Stakeholders Start Selling Shares

Shares of Trump Media & Technology Group experienced a significant decline Friday morning, reaching their lowest point ever. This marks the first trading day since former President Donald Trump is allowed to sell his stake in the company that operates the Truth Social platform.

At the opening bell, Trump Media’s shares dropped nearly 7 percent, landing at $13.73. This decline decreased the company’s overall valuation to under $3 billion, of which Trump holds a majority share.

Due to lock-up agreements that restrict major shareholders from selling their stakes for a specific period after a company’s public debut, Trump and other insiders have been unable to realize any gains on their investments. TMTG started trading publicly in March.

Filings with the Securities and Exchange Commission reveal that Trump possesses nearly 115 million shares of the company. With the early Friday stock price, the market value of his holdings is approximately $1.6 billion on paper. Selling large amounts of stock is usually risky for significant stakeholders, as it could potentially trigger a broader market decline.

Since its public launch, TMTG’s stock has seen considerable volatility, often in response to news involving Trump, who is currently the Republican presidential nominee.

Just last week, the company’s stock surged nearly 12 percent after Trump announced he had no intention of selling his shares following the lifting of the lock-up period. However, earlier this month, the stock took a hit, dropping more than 10 percent after a debate featuring Trump and Vice President Kamala Harris. Interestingly, shares increased over 31 percent in mid-July on the first trading day after an assassination attempt on Trump.

The worth of Trump Media has noticeably diminished in recent months. When the company first entered the Nasdaq in March, shares reached a peak of $79.38.

Truth Social was launched in response to Trump’s bans from Twitter and Facebook after the events of the January 6, 2021, Capitol riot. Despite its ambitious beginnings, Trump Media, headquartered in Sarasota, Florida, has been facing financial hurdles. According to regulatory filings, the company reported a loss of nearly $58.2 million last year while generating a mere $4.1 million in revenue.

The struggles of Trump Media reflect the broader challenges faced by social media platforms, particularly those linked to controversial figures. As the company tries to navigate the tumultuous landscape of public trading and shareholder expectations, its future remains uncertain.

Shareholders and potential investors will likely be keeping a close eye on any developments concerning Trump’s holdings and the company’s ability to turn a profit. The stock’s performance in the coming weeks will be crucial for Trump Media as it attempts to recover from its recent downturn.