The stock, which trades as DJT on the Nasdaq, dropped more than 6% at the market open, putting the company on track for its sixth straight day of declines.
Trump Media's share price has fallen more than 80% since the company surged in its public trading debut in late March. The stock as of Monday morning was at its lowest intraday level since July 2023.
The company's market capitalization, which crossed $10 billion in March, has shrunk to about $2.5 billion. Trump owns nearly 57% of the company's outstanding shares, which as of Monday morning at 10:30 a.m. ET was worth less than $1.5 billion.
Trump and other company insiders have been bound by lockup agreements that barred them from selling their shares in the initial months after Trump Media went public.
Those restrictions expired at the closing bell Thursday.
Trading volume accelerated significantly as the lockup lifted. More than 14 million shares changed hands on Thursday and nearly 22 million were exchanged Friday, far exceeding the 30-day average volume of about 8.3 million shares.
Within the first 90 minutes of trading Monday, traders swapped about seven million shares.
Trump, a main draw for Truth Social users and many retail investors in the company, said earlier in September that he will not sell his stake. The stock price briefly shot up after his remarks.
Other early investors have made no such promises. They include ARC Global, a sponsor of the blank-check firm that took Trump Media public, and United Atlantic Ventures, an entity controlled by two former contestants on Trump's reality show “The Apprentice.”
ARC and UAV owned nearly 11% of outstanding DJT shares, Trump Media said in a regulatory filing in early September. But ARC's stake may have grown after a Delaware judge ruled on Sept. 16 that Trump Media breached an agreement with the sponsor and owes it more stock.
Trump Media Stock Plummets After Lockup Expires
After the lockup period on Donald Trump’s shares came to an end Friday, shares of Trump Media — the company that owns the former president’s social media site, Truth Social — have slid to new lows. Shares fell 7%, trading at $12.56 each Monday morning.
That tipped the company’s market capitalization to $2.5 billion, a nearly 80% plunge from its high-flying days in the aftermath of its Nasdaq debut on March 26.
Despite speculation, Trump himself said earlier this month that he has “absolutely” no plans to dump his stake in the company — even though he stood to earn upwards of $2 billion from a potential stock sale.
“The reason I built it is because I don’t want to have my voice shut down,” Trump said during a press conference at his golf course near Los Angeles on Sept. 13. “A lot of people think that I will sell my shares, you know, they’re worth billions of dollars, but I don’t want to sell my shares. I don’t need money.”
Trump holds 114.75 million shares of Trump Media, or about 60% of the company’s outstanding stock. In a regulatory filing in June, Trump Media cited Trump’s divestment from the company as one of the top risks to its business.
Even as Trump continues to hold on to his shares, however, the stock has depreciated considerably in recent weeks, including after his debate performance against Vice President Kamala Harris.
That’s because much of the company’s success is tied to the former president’s personal and political fortunes. The company itself has warned in filings that “adverse reactions to publicity relating to [Trump], or the loss of his services, could adversely affect TMTG’s revenues and results of operations.”
As the presidential election nears, the stock could continue to face challenges. John Rekenthaler, vice president of research at Morningstar (MORN), previously told Quartz that he would “expect the stock to go to zero or something close to it, if [Trump] were to lose the election.”
The Lockup Expired, Will Trump Sell?
The former president has vowed not to sell his stake.
Trump Media shares dropped below $13.80 as of 9:35 a.m., following another dip Thursday to a third-straight record low after closing down nearly 6%.
Trump Stock Drops as Lockup Ends
The ban’s expiration also allows other shareholders who own 5% or more of shares or those who serve in high-level management roles to sell their shares.
Trump said last week he has “absolutely no intention” of selling his shares in the Truth Social parent company, whose shares are down more than 18% this week.
The value of Trump’s stake—totaling 114.75 million shares—dropped from $2 billion last Friday to $1.58 billion as of today’s share price.
Trump’s Grip on His Company, and His Fortune, Is Weakening
The company closed down nearly 6%, at $14.70, as the six-month lockup period preventing insiders from selling the stock expired after Trump Media merged with blank-check company Digital World Acquisition Corp to take it public.
Trump, the majority owner with a 57% stake now valued at around $1.7 billion, said last week that he has no intention of selling his position — a move that would effectively devalue the stock.
The Republican presidential nominee and other large investors, who collectively own more than 20 million shares, were free to sell the stock after the closing bell.
Trump Media debuted on the Nasdaq to great fanfare in March, with the share price soaring to more than $60.
But It has suffered volatile swings during his run for the White House as incumbent Joe Biden dropped out and Kamala Harris got the Democratic nomination.
The latest polls show Trump and the Vice President are virtually tied in the major swing states.
Trump launched Truth Social in February 2022 after he was banned from major sites such as Facebook and the platform formerly known as Twitter following the Jan. 6 attack on the US Capitol.
He’s since been reinstated to both — and endorsed by X owner Elon Musk — but he still mostly posts on his own platform.
While Truth Social sought to capitalize on the outrage over Trump’s bans, it has struggled gaining traction.
The platform had less than 1 million daily active users as of April, according to data from Similarweb.
Trump’s Shares Are Unlocked, But The Future of Trump Media Is Uncertain
One of the most powerful people on the planet has been blocked from selling one of his most prized assets.
Until now.
The restraints preventing former President Donald Trump from selling shares in his social media company are set to expire as soon as Thursday afternoon.
This will free Trump – and other insiders at Trump Media & Technology Group – to sell shares in the controversial company that owns Truth Social if they wish.
It’s a major moment for Trump Media, whose share price has fallen dramatically since going public in March.
The former president is the face of the company and its dominant shareholder. The risk that Trump and other insiders could rush for the exits has been hanging over the stock for weeks.
However, Trump has declared that he isn’t going anywhere, telling reporters last week: “No, I’m not selling. No, I love it.” Those comments sent Trump Media’s share price skyrocketing, for a few hours at least.
It’s a big decision for Trump, who has seen the value of his stake plunge to $1.8 billion. As recently as four months ago, it was worth $6.2 billion.
Even if Trump wanted to unload all or most of his shares, he would be limited by the reality of the situation: Someone who owns 57% of the stock can’t simply call his broker and sell all – or even most of the shares – without tanking the share price.
“He’s smarter than that,” said Michael Stegemoller, a finance professor at Baylor University. “Obviously he wouldn’t want to dump all of his shares onto the market. It would be a massive supply of shares. It would not go well for the share price – or him.”
Trump Media is inextricably linked to the former president.
Not only does Trump own a controlling stake in the company, but his initials are the stock ticker symbol (DJT) and he is the most popular user on the main product.
“This is a company whose value is so utterly tied up in one person. It’s pretty strange. Not even with Apple and Steve Jobs did we see something like this,” said Stegemoller.
That’s why it’s so crucial that Trump has signaled he isn’t selling.
“People think that I’m leaving. That’s why they’re down, ‘cause it’s different if I leave. But I’m not leaving,” Trump told reporters last week.
If Trump changes his mind and decides to sell even some shares, he will be required to disclose that transaction publicly within two business days.
The Securities and Exchange Commission requires shareholders owning more than 10% of a company’s shares to file a Form 4 detailing stock sales.
Lock-up restrictions like the ones facing Trump are typical in deals like the one that brought Trump Media public last spring.
The idea is that it’s not a good look for early insiders to immediately rush for the exits, so they promise not to sell or even borrow against their shares for around six months.
If Trump Media remains above $12 on a closing basis, the lock-up restrictions lift as early as the close of trading on Thursday.
However, there is some ambiguity in the documents about precisely when the lock-up period ends, with some suggesting it could be a few days later.
Shares of Trump Media closed at a record low on Wednesday.
Regardless of what the share price does, the lock-up restrictions are set to expire by September 25 at the latest.
The Risks Don’t End with Trump
Trump selling is not the only risk.
Once the lock-up restrictions lift, other insiders will also be able dump their shares.
For instance, two of Trump Media’s co-founders – Andy Litinsky and Wes Moss – could decide to exit their positions. Both Litinsky and Moss, former contestants on Trump’s NBC show “The Apprentice,” have battled the company in court over their shares.
Another question is whether Trump will decide to raise cash by pledging his shares in Trump Media as collateral in a loan.
Such a move would allow him to avoid the optics of outright selling his shares. But it would also require Trump to find a bank, financial institution or other individual willing to lend to him – and that may be no small task.
Trump would likely need to disclose that he put his shares up as collateral in a loan, several legal experts told CNN. Failure to do so could cause trouble with regulators.
Last month, the SEC fined legendary investor Carl Icahn for failing to disclose information linked to his alleged decision to pledge vast amounts of shares in his holding company to secure personal loans worth billions of dollars. Icahn settled the charges without admitting or denying the findings.
“Compliance with that requirement has often been a bit spotty, but the SEC just extracted a big fine from Carl Icahn a few weeks ago for failing to make a very similar filing,” said Xavier Kowalski, a former partner at Schulte Roth & Zabel who is now a lecturer in the finance department at the University of Florida. “I would expect the SEC to take a harder line against anyone else doing the same thing.”
The Bottom Line
The expiration of the lockup period is a major event for Trump Media. It could lead to a flood of selling, further depressing the share price. But it also represents an opportunity for the company to prove itself to investors. If Truth Social can gain traction and become a viable platform, the stock could rebound. However, the company's future remains uncertain, and it is heavily reliant on Trump's continued involvement. It’s a company that’s already weathered some storms, but the next one could be the biggest yet.
