Trump Media shares lose 2024 gains as key sales date approaches

Trump media Shares closed below their year-end 2023 levels on Wednesday as stock in maker Truth Social continued to decline ahead of the date on which majority owner Donald Trump can begin selling his shares.

The collapse in DJT's share price, which followed a brief rally in mid-July triggered by the former president's survival of an assassination attempt, has wiped billions of dollars off the company's market capitalization.

Trump Media ended the trading day at $16.98 per share, down 6 percent.

The stock has fallen more than 75 percent since its intraday high of $79.38 per share, which it reached on its Nasdaq debut in late March following the merger of Trump Media with a special purpose acquisition company.

The stock price has fluctuated since then as traders and analysts increasingly viewed Trump Media as a meme stock, with its value rising and falling with the Republican presidential candidate's political success.

Shares of the SPAC, Digital World Acquisition Corp., traded at $17.50 at the close on December 29, the last trading session of 2023.

They skyrocketed in mid-January, around the time Trump emerged as the clear frontrunner in the Republican presidential primaries.

A Trump Media spokesperson told CNBC: “Trump Media is rapidly expanding our platform while maintaining a strong balance sheet.”

“So far in 2024, we have achieved a major milestone with the launch of our in-app streaming platform on our non-terminable, bespoke content delivery network, while maintaining a strong second quarter financial position with $344 million in cash and cash equivalents and zero debt,” the spokesperson said.

Despite losing millions in several quarters and seeing little revenue from ad sales at Truth Social, Trump Media's market capitalization currently stands at around $3.5 billion, down from nearly $8 billion at its post-merger peak in late March.

Trump owns nearly 59 percent of the company's outstanding shares, which Forbes reported were worth nearly $2 billion at Wednesday's price – about half of his total net worth on paper.

Trump and other company insiders cannot sell their shares until a lock-up period expires, which could be as early as September 19.

The looming deadline has fueled speculation about whether Trump will try to sell his shares or hold on to his stake.

If he actually sells, he could shake other investors' confidence in the stock and drive the price even further down.

Even if he doesn't, other early investors might. Trump Media asked a Florida judge in August to temporarily bar two companies involved in the SPAC merger from selling more than 18 million shares after their lock-up period expires.

The company's request, which described the sale as “imminent,” was rejected.

As the deadline for his detention approached, Trump increasingly posted on other social media platforms, including TikTok and Elon Musk's X.

Nevertheless, Trump spoke about Truth Social in a recent interview with podcaster Lex Fridman.

“The truth is very powerful,” Trump said. “And it's my platform and it's been very powerful, very, very powerful.”

“Truth has become a very successful platform. And I love doing it, and it goes everywhere. Once I do it, it goes everywhere,” he added.