Former US President and current Republican presidential candidate Donald Trump speaks about the economy, inflation and manufacturing during a campaign event at Alro Steel on August 29, 2024 in Potterville, Michigan.
Bill Pugliano | Getty Images
Shares of Trump media fell to a new post-merger low on Thursday, the day former President Donald Trump is expected to be able to begin selling his nearly $2 billion stake in social media platform owner Truth Social.
The company, which trades as DJT at Nasdaqclosed up nearly 6% at $14.70 a share.
Trump, the Republican presidential candidate, owns nearly 57% of DJT’s stock. That stake at Thursday’s closing price was worth nearly $1.7 billion — nearly half of Trump’s estimated on-paper net worth.
Trump Media (DJT) stock price.
Trump, and other early investors, have been barred from selling their shares under a lock-up agreement that went into effect when the company went public after merging with a blank check company in late March.
These restrictions expire at the closing bell on Thursday.
Trump Media has acknowledged in regulatory filings that the end of the lockup could trigger a big selloff in the company’s stock, and even the market’s perception of a selloff could lower DJT’s share price.
Trump, the majority shareholder, said Friday that he has no plans to sell his stake. His assurance sent the stock soaring, though it has since given up those gains.
Other company insiders, however, may try to cash out as soon as they get the chance to do so.
The company’s fortunes are tied to those of Trump, whose use of Truth Social makes him a key draw on the platform.
After surging in its public trading debut, Trump Media suffered a month-long stock decline that coincided with Trump’s tumultuous presidential campaign against Democratic nominee Kamala Harris.
The decline has shaved billions of dollars off Trump Media’s market value, bringing it closer to what some analysts say the company is actually worth.
Trump Media’s earnings reports show it lost about $344 million on revenue of less than $2 million in the first half of the year. Its revenue depends entirely on ad sales, but its unique product, Truth Social, generates only a fraction of the user base of more established social networking sites.
But the company still boasts a market capitalization of nearly $3 billion, as some small investors appear to be buying it as a way to support Trump or bet on his political position.
After Trump narrowly survived an assassination attempt at a campaign rally in July, shares of Trump Media soared. But the stock began falling later that month, around the time Harris replaced President Joe Biden as the Democratic nominee and quickly chipped away at Trump’s lead in the polls.
The stock rallied again ahead of the Sept. 10 presidential debate, which some saw as a bigger risk to Harris than Trump. But after Trump’s performance drew poor reviews — both in the polls and from a number of conservative commentators — DJT shares plummeted to a new low after the merger.
As the lockup nears its end, Trump Media has sought an injunction that would prevent ARC Global, the sponsor of the merger that took the company public, from immediately selling its shares.
A judge in Florida said Wednesday that he will not issue an injunction.
A Delaware judge had ruled on Monday that Trump Media breached its agreement with ARC and must give the investor a larger share of its stock.
— CNBC’s Josephine Rozzelle contributed reporting.
