The date on which former President Donald Trump is eligible to offload shares in his social media company is rapidly approaching—though when it finally comes, it’s likely to offer far less of a treasure than it was earlier this year.
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Here's your Forbes Daily Briefing for Sunday, September 8th. Today on Forbes, when can Donald Trump sell DJT stock? Here's what to know as Truth Social hits new lows. The date on which former President Donald Trump is eligible to offload shares in his social media company is rapidly approaching. Though when it finally comes, it's likely to offer far less of a treasure than it was earlier this year. Trump owns about 60% of all shares in Trump Media and Technology Group, the parent company of the conservative social media platform Truth Social, which trades on the NASDAQ stock exchange under the ticker DJT, Trump's initials. Trump Media went public March 26th through a reverse merger with a special-purpose acquisition company, or SPAC, concluding a 29-month process of going public, marred by headaches like insider trading convictions and accounting errors. The March debut initiated what's known as a lock-up period, a standard procedure for newly public companies in which certain shareholders, like those who own 5% or more of shares, or who serve in a high-level management role, can't sell shares until a predetermined date. The company's latest prospect is filing with the Securities and Exchange Commission, outlines three factors that would trigger the lock-up period to conclude. Number one, the end of the first six months of DJT stock trading as its own entity. Number two, Trump Media shares trading above $12 for any 20 of 30 trading sessions beginning August 23rd, or number three, a transaction like a merger in which all shareholders have the opportunity to trade in their Trump Media Holdings at the same price. That means the earliest possible date Trump can sell is September 19th, if Trump Media shares remain above the $12 threshold, which itself is not a guarantee with a share price around $17 on Friday. The latest his selling window would open is September 25th, the end of the opening six-month period of DJT's direct public listing. We don't know if Trump will sell when eligible, or how much of his stake he would unload. 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, referring to itself as TMTG, 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, the Trump Media spokesperson said last month, there isn't, quote, "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. He said it may be, quote, "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, of course, 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 percent from its March record of $79, and 60 percent from its July peak of $46. That has wiped out billions of dollars from Trump's net worth, which sat at $3.8 billion Friday, down from its near $8 billion level in the spring. 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's 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's social parents' market value was about $3.4 billion Friday, 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. For full coverage, check out Derek Saul's piece on Forbes.com. This is Kieran Meadows from Forbes. Thanks for tuning in.
