Trump soon can sell slumping Truth Social stock
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Truth Social's parent company has spent most of 2024 trading sky-high, despite generating less revenue than some individual Substacks.
- But lately it's slid toward the soured SPAC pack.
Why it matters: Former President Trump holds nearly 115 million shares, and is allowed to begin selling late next month.
- Were he to do so, it could be a financial gamechanger for his campaign. Depending on the price.
The latest: Trump Media & Technology Group yesterday traded below $20 for the first time since merging with a SPAC on March 26.
- That's down around 75% from its 2024 high, which means Trump has lost billions of dollars in paper value.
- This is despite receiving 36 million extra shares in late April, thanks to a generous earnout provision.
- It also means lots of shareholders, including retail investors, are deep in the red. Particularly if they bought three years ago when the SPAC merger was first announced, and the intraday share price hit $175.
By the numbers: Trump's position was valued at around $2.3 billion as of yesterday's close.
- Still a pretty heady figure going into the lockup expiration, although it was $3.46 billion just one month ago. At that pace, he'd be down to $1.5 billion by the time he can sell.
Zoom out: It's remarkable that there's even a few million dollars of market value in a little-used social media copycat like Truth Social, let alone billions of dollars.
- Chalk it up to Trump's rabid fandom and meme stock culture.
The bottom line: Trump hasn't disclosed his stock plans.
- He's in something of a chicken-and-egg situation, in that any disposals could spark a sell-off that tanks the value of his remaining shares.
- Plus, it's unclear if there would be buyers for millions of shares, let alone at market prices.
- Particularly as Trump recently returned to Twitter/X, albeit with much less posting volume than on Truth Social, where he continues to honor a social media "exclusivity" agreement that has carveouts for political messaging.
