Shares of Trump Media & Technology Group (TMTG), the parent company of Truth Social, experienced a significant drop on Friday, marking its lowest opening price ever. This coincided with the expiration of the lock-up period, allowing former President Donald Trump, the company’s largest shareholder, to sell his stake. TMTG stock tumbled almost 7 percent to $13.73, reducing the company’s valuation to under $3 billion.
Trump holds a majority ownership in TMTG, possessing nearly 115 million shares. At Friday’s opening price, his holdings were valued at approximately $1.6 billion. However, selling a large portion of his stake could trigger a broader sell-off, potentially further depressing the stock price. Standard lock-up agreements prevented Trump and other insiders from selling their shares for a designated period after the company went public in March.
The stock price of TMTG has been highly volatile since its public debut, often fluctuating in response to news related to Trump and his political activities. For instance, shares surged nearly 12 percent the previous week after Trump announced he wouldn’t sell his shares upon the lock-up expiration. Conversely, the stock declined over 10 percent following a debate between Trump and Vice President Kamala Harris.
TMTG’s current valuation is significantly lower than its peak in March when shares reached a high of $79.38 during its Nasdaq debut. The company’s financial performance has been challenging, with a reported loss of nearly $58.2 million last year and revenue of only $4.1 million.
Truth Social was 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 face challenges in generating revenue and achieving profitability.
