Former President Donald Trump will likely become eligible to sell shares in his social media company later this week, opening a social media nest egg that's likely to offer far less of a treasure than it was earlier this year, though Trump vowed Friday he "absolutely" does not plan to sell his holdings.
"I'm not selling, I love it," Trump said at a Friday press conference when asked if he'd trim his stake in the Truth Social parent when the lock-up period expires this month.
How easily Trump could sell shares in his namesake firm if he reversed course, or the impact of a sale on the value of his media company. The Trump Media prospectus says, "because President Donald J. Trump is a candidate for president, he may, subject to the Lock-up Period, divest his interest in Truth Social." The company also warns "the sale...could have the effect of increasing the volatility in TMTG's share price or the market price of TMTG common stock could decline if the holders of currently restricted shares sell them." Despite the warning, a Trump Media spokesperson said last month there isn't "any conceivable sign anywhere" Trump intends to sell his stock. Logistics also may be a challenge, as Boston College professor Brian Quinn noted to Bloomberg it may be "very difficult" for Trump to sell a major chunk of his shares given the regulatory restrictions that exist even after a lock-up period expires. And as for every stock transaction, someone needs to be on the other side of every trade.
Trump Media's share price is down roughly 80% from its March record of $79 and 60% from its July peak of $46. That has wiped out billions of dollars from Trump's net worth, which sat at $3.9 billion at Monday's close, down from its near $8 billion level in the spring, according to Forbes' calculations. Still, Trump is far richer than he was prior to DJT's debut which awarded him a majority stake in the company, with his fortune estimated at $2.3 billion just ahead of the launch.
Previously viewed as a rough proxy that rose and fell as Trump's odds to prevail in November's presidential election ebbed and flowed, Trump Media stock has declined steadily in recent weeks as the expiration of the lock-up period neared and Trump returned to X, the rival social media site previously known as Twitter. The Truth Social parent's market value was about $3.5 billion at Monday's close, down from a near $10 billion peak in May, though experts suggest the company is likely still overvalued, considering it booked a $16 million loss on $837,000 in sales during its most recent quarter. Reddit, another social media company which went public in March, has a market cap of $9.8 billion and most recently reported a $10 million quarterly loss on $281 million of sales.