Insiders at Trump Media & Technology Group (NASDAQ:DJT) owned social media platform Truth Social have started offloading their shares.
Meanwhile, Donald Trump is still waiting for his opportunity to cash in on his stake in the social media company.
What Happened: Executives at Truth Social have initiated the sale of their shares. The social media platform began trading on NASDAQ following its merger with Digital World Acquisition Corp. in late March. Despite an initial valuation of over $3.8 billion and a share price of $57.99, the company’s stock has since taken a nosedive to $19.60.
Trump currently owns more than 114 million shares in Trump Media, a stake valued at about $2.5 billion. The company trading under the ticker DJT, is unable to liquidate his shares until Sept. 25 due to a lock-up period rule, as per SEC filings.
As per a report by Fortune, other insiders, including Trump Media’s CFO Phillip Juhan and CEO Devin Nunes, have already begun selling their shares.
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Robert R. Johnson, a finance professor at Creighton University, told Fortune that the stock price of Truth Social is largely disconnected from the company’s financial reality.
In Q1 2024, the company reported a staggering loss of $327 million on revenues of a mere $770,500.
While Trump could potentially sell his shares by Sept. 20 if the share price remains steady, it’s unlikely he would sell his entire stake considering the potential impact on the stock’s value and his political supporters who are also shareholders.
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Why It Matters: The selling of shares by Truth Social executives raises questions about the company’s future. The stock’s drastic decline and the company’s significant Q1 loss indicate a disconnect between the company’s financial reality and its stock price.
This discrepancy, along with the impending end of Trump’s lock-up period, could potentially lead to further instability in the company’s stock price.
The situation is further complicated by the fact that many of Trump’s political supporters are also shareholders, adding a layer of political implications to any potential sell-off.
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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
