Trump Media tumbles 18% after taking the first step towards unlocking early insider stock sales

Trump Media tumbles 18% after taking the first step towards unlocking early insider stock sales

Former President Donald TrumpScott Eisen/Getty Images

  • Trump Media dropped as much as 18% after a new filing showed that it was registering shares.

  • The move could potentially allow insider shareholders to unload their stock before the end of  the six-month lockup window.

  • With the stock tanking, the value of Donald Trump’s stake has slumped to $2.2 billion.

Trump Media opened the week by plummeting sharply on Monday, as the firm moved to allow company insiders to sell their shares earlier than permitted.

The social media startup fell as much as 18% to an intraday low of $26.83, extending a sudden slump that began March 27. Since then, the firm has tanked close to 56%.

Monday’s downside momentum came on news that the company filed to register shares with the Securities and Exchange Commission. Though this doesn’t indicate a sale is about to occur, it’s the first step for insiders to be able to start unloading their shares — currently, they’re restricted from selling until September.

Former President Donald Trump is the majority stakeholder in the company, and could unlock billions in windfall profit if he manages to cash in his stock. He founded the firm to launch Truth Social, a media platform made after his 2021 ban from sites such as Twitter and Facebook.

Last month, the company gained meme stock status after going public through a blank check deal, with Trump supporters diving into the market and sending shares to a peak of $66.4.

But since then, the stock has slid into a free fall, after Trump Media reported net losses of $58 million in 2023. With shares declining, Trump’s stake is now valued at $2.3 billion, a figure that was over $5 billion just weeks prior, Bloomberg reported.

In Monday’s S-1 filing, the company registered over 146 million shares of common stock, of which Trump holds 114.8 million, CNBC said. 4 million warrants were also registered, referring to stock-adjacent contracts that can be exchanged for cash.

Additionally, more than 21 million shares of common stock are issuable upon the exercise of warrants. The firm expects to receive approximately $247.1 million from exercising these securities.

Read the original article on Business Insider