The shares of the company Republican presidential candidate Donald Trump dropped by 10% yesterday, marking a new low and extending recent losses after sales restrictions were lifted, the so-called period of lock-up tied to debut on the stock exchange in March. According to the provisions relating to the listing of Trump Media & Technology Group, starting from the end of this month, Trump and other investors will be allowed to sell shares, potentially flooding the market with further selling.
Shares of Trump Media & Technology Group, which Trump owns 57%, are down from six consecutive sessions, even if the price chart shows a downward trend that started before the summer, albeit with some occasional recoveries. Its capitalization market cap is at $2,4 billion. Shares of the company, which operates the Truth Social app, closed yesterday at 12,15 dollars, Lowest close since debut on Trump Media's stock exchange, Reuters reports.
Who Might Sell Trump Media Stock?
Last week Trump had said he would not sell his shares, but even if he did, there are other major shareholders who could soon do so, including United Atlantic Ventures e Patrick Orlando, the bottom of which, Arc Global Investments II, sponsored the company that merged with Trump Media in March. The two together own 11% of Trump Media. “Even if Trump doesn’t do it, it would be interesting if other insiders started selling,” said Steve Sosnick, chief strategist at Interactive Brokers, in a statement. Reuters.
The size of Arc’s stake in Trump Media is a matter of dispute. A Delaware judge ruled this week that Arc Global should receive 8,19 million shares of Trump Media, more than the roughly 7 million shares the company said Arc was entitled to. Separately, Truth Social cofounders Andy Litinsky and Wes Moss are suing TMTG for damages for preventing them from selling their shares sooner.
The market would not be able to absorb even a partial sale
Donald Trump owns 56,6% of the shares of Media Trump, United Atlantic 5,5%, Arc Global 5,5% and then there are Phillip Juhan 0,2%, Devin Nunes 0,06%, Scott Glabe 0,01%
Trump Media shares are trading at the equivalent of over 1.000 times its turnover, far surpassing even the AI superstar's rating, Nvidia, which recently traded at 24 times its sales.”The market would not be able to absorb “Not even a partial sale of shares without doing a huge amount of damage to the stock,” Sosnick said. “Ultimately, a lot will depend on whether (Trump) keeps his word not to sell, while the company’s long-term prospects are entirely dependent on his election prospects.”
Betting on Trump's chances of victory
After its debut on Wall Street, Trump Media's value skyrocketed to nearly $10 billion, thanks to Trump supporters and traders who saw it as a speculative bet on his chances of securing a second term four-year presidential term. But Trump Media shares have steadily lost ground since Joe Biden he withdrew from the US presidential race.
Polls show either Trump or US Vice President Kamala Harris in the lead at times: this leads to the conclusion that the confrontation between the two will be tough ahead of the November 5 presidential election. In an interview on Sunday, Trump said he would not run for president of the United States for a fourth consecutive term if he loses the November 5 election.
