The stock price of Trump Media & Technology Group (TMTG), owned by former President Donald Trump, has hit a new low. The company experienced a continuous six-day drop, particularly after the lifting of restrictions on insider selling. On September 23, 2024, the share price of TMTG, which operates Truth Social, fell by 10%, closing at $12.15. This was the lowest recorded value since the company’s March 2024 debut on the Nasdaq.
The substantial drop comes in the wake of the lock-up period’s conclusion, during which company insiders, including Trump, were prohibited from selling their shares. Trump, holding roughly 57% of TMTG, has seen his stake decrease to an estimated $1.4 billion. Despite the continuous dip in stock value, Trump declared he has “no intention of selling” his shares.
With the expiration of insider selling restrictions, fears have escalated that other key shareholders may start selling off their shares, leading to a further decrease in the stock price. United Atlantic Ventures and Patrick Orlando, both of whom played significant roles in the public listing of TMTG through a merger facilitated by Orlando’s ARC Global Investments II fund, hold about 11% of the company’s shares. Analysts suggest that any significant sale by these shareholders could trigger further decline in the stock price.
Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, warned of potential consequences. “Not only will the possible new selling activity affect DJT’s stock price directly, but it will also increase DJT’s stock lending pool, which will facilitate increased short selling in the stock,” Dusaniwsky stated.
Since its early days, TMTG’s stock has experienced a significant downturn. Despite peaking at nearly $10 billion in market capitalization shortly after its Wall Street debut, its value has since dwindled to $2.4 billion. The company’s share price has fallen 17% recently, marking the end of the lock-up period. This has made it challenging for TMTG to restore investor confidence amidst ongoing political and financial uncertainties.
Market analysts suggest that while TMTG initially gained from Trump supporters and retail traders speculating on his potential return to the presidency, the company has had difficulty maintaining momentum. Recent losses have exceeded the decrease in PredictIt betting odds on Trump winning the 2024 election.
Despite polls showing Trump leading in battleground states such as Arizona, Georgia, and North Carolina, the current political landscape has not translated into stock market stability for TMTG. The race against Vice President Kamala Harris remains tight, and TMTG’s stock continues to suffer.
Further adding to the uncertainty, other early investors in TMTG have not committed to retaining their shares. ARC, a major stakeholder, could potentially sell off a significant portion of its holdings. According to regulatory filings, ARC and United Atlantic Ventures hold a substantial number of outstanding shares. A recent ruling by a Delaware judge found that TMTG breached an agreement with ARC, potentially resulting in ARC receiving additional shares.
The end of the lock-up period and the subsequent drop in stock value present challenges for both the company and its shareholders. According to financial experts, such developments are expected given the speculative nature of the stock and the influence of political factors.
Despite the grim outlook, Trump remains hopeful about TMTG’s future, revealing plans to introduce new company innovations. While the company ended its last quarter with $344 million in cash and no debt, providing some financial stability, the significant decline in stock price has fueled concerns about continued losses.