Shares of Trump Media & Technology Group (TMTG), the parent company of Truth Social, plummeted to a record low opening price on Friday as the lock-up period expired, allowing major shareholders, including former President Donald Trump, to sell their stock. TMTG stock fell almost 7 percent to $13.73, reducing the company’s valuation to under $3 billion.
Trump holds a majority stake in TMTG, with nearly 115 million shares. At Friday’s opening price, his holdings were valued at approximately $1.6 billion. However, a large sell-off from Trump could trigger further declines in the stock price. Standard lock-up agreements prevented Trump and other insiders from selling their shares for a designated period following the company’s public listing in March.
TMTG stock has been highly volatile since its debut, often reacting to news surrounding Trump and his political activities. For example, shares surged nearly 12 percent the previous week after Trump announced he wouldn’t immediately sell his shares. Conversely, the stock dropped over 10 percent following a debate between Trump and Vice President Kamala Harris.
TMTG’s current valuation is significantly lower than its March peak of $79.38 during its Nasdaq debut. The company’s financial performance has been challenging, reporting a loss of nearly $58.2 million last year with revenue of only $4.1 million.
Truth Social launched after Trump was banned from major social media platforms following the January 6, 2021 Capitol riot. Headquartered in Sarasota, Florida, the platform continues to struggle with revenue generation and profitability.