Trump’s Social Media Company Stock Plunges 18% as Potential Massive Share Sale Looms

Since its March 26 listing, following a merger with Digital World Acquisition Corp, the company's stock has been marked by significant fluctuations.

Shares of Donald Trump’s social media enterprise, Trump Media & Technology Group (DJT.O), plummeted 18% on Monday, continuing a downturn since the stock first appeared on the market last month.

This recent decline occurred after an announcement that the company might issue millions of new shares in the future, potentially including all shares held by the former president.

Since its March 26 listing, following a merger with Digital World Acquisition Corp, the company’s stock has been marked by significant fluctuations.

Opening at $70.90 on its initial trading day, it has since dropped nearly 60%, closing recently at $26.61.

Trump Media & Technology Group, the operator behind Truth Social, has drawn attention from ardent Trump supporters as well as short sellers who believe the stock is excessively overvalued.

The latest development involved a regulatory filing known as a registration statement, a routine procedure following a public debut via a special purpose acquisition company (SPAC).

SPACs are designed to facilitate public trading of unlisted entities by initially raising funds through an IPO with the goal of acquiring another business.

Peter Byrne, a securities lawyer with Cooley LLP, explained that such filings are obligatory to allow original investors to resell their shares legally and freely post-merger. “It’s completely standard,” Byrne stated.

Despite no explicit signs from company affiliates of an immediate intent to sell, the filing does pave the way for Trump, among others, to potentially divest his holdings once the lock-up period concludes or is lifted.

Detailed in the document was the possible sale of up to 146.1 million shares, 114.8 million of which are owned by Trump.

This figure includes 78.75 million currently held, plus additional shares contingent on meeting specific performance thresholds.

Moreover, the filing outlined the potential sale of an extra 21.5 million shares tied to the exercise of particular warrants issued during the company’s public launch.

In other news, Trump, the Republican presidential candidate for the upcoming November election, is presently engaged in a trial in Manhattan over accusations related to payments to a porn star, to which he has pleaded not guilty.