Shares of Donald Trump’s media venture, Trump Media & Technology Group, have seen a continued decline as the end of insider trading restrictions approaches. The stock fell 3.6% on Tuesday, marking a total drop of 7% for the week. This downturn comes despite a previous surge of 12% after Trump stated he had no intention of selling his substantial $1.9 billion stake in the company.
The decline is attributed to typical market behavior preceding the expiration of “lock-up” periods, during which insiders are barred from selling their shares. Such circumstances often lead to uncertainties, as investors brace for potential sell-offs by company insiders upon restriction lifts.
Once valued at nearly $10 billion following its debut on Wall Street, Trump Media operates the Truth Social app, which has garnered support from both retail investors and fans of Donald Trump. The company’s market cap now rests at about $3.3 billion, with shares trading at approximately $16.68. This represents a dramatic drop of around 75% from a peak exceeding $66 earlier in the year. The decline has intensified in recent weeks as political dynamics shift—President Joe Biden’s choice not to seek reelection has prompted a reevaluation of Trump’s political future and market prospects ahead of the November 5 presidential election.
Despite its high profile, Trump Media’s financial performance remains modest, with revenues comparable to just a couple of Starbucks locations. It is currently facing challenges as it continues to burn through cash reserves.
Insiders such as United Atlantic Ventures and Patrick Orlando, who is linked to the blank-check company responsible for merging with Trump Media, also stand to sell shares post-restriction, which could add further pressure on the stock. If Trump Media’s share price remains stable or above $12 through Thursday, shareholders will be free to sell starting Friday. Otherwise, the earliest eligibility for selling shares would be September 26.
Investors will be closely watching the market response as the situation develops, especially with sentiments surrounding Trump’s political aspirations intertwined with the stock’s performance.