Trump is permitted to dispose of his TMTG stocks today.
Today, the restriction stopping Donald Trump from selling shares in his company, Trump Media and Technology Group (TMTG), is predicted to conclude. Despite the substantial decrease in stock value, he has no intentions of selling and maintains a positive outlook. If he decides to alter his stance, it could result in severe implications.
Currently, a restriction known as a lock-up agreement has prevented Donald Trump, along with other company insiders, from selling their shares in TMTG's parent company, which manages the Truth Social platform. This lock-up agreement is set to expire today, allowing these individuals to convert their shares into cash. This development is significant for the company, as its stock value has dramatically decreased since its March initial public offering (IPO). The potential for majority shareholder Trump to exit the company and further impact the stock has hung over it for weeks.
However, these fears seem unwarranted. Last week, Trump stated to reporters, "Lots of people think I'm going to sell my shares. They're worth billions elsewhere. But I don't want to sell my shares. I won't be selling my shares. I don't need the money." This comment temporarily boosted the stock value. By holding onto his shares, their value has reduced to $1.8 billion, down from $6.2 billion four months prior.
Trump owns a 57% stake in the company's shares. Even if he wanted to sell, the potential impact on the stock price would be substantial. "He's smarter than that," Michael Stegemoller, a finance professor at Baylor University, commented. "Of course, he wouldn't want to sell his entire stake at once. That would inject a massive amount of shares into the market, which wouldn't be good for the stock price – or for him."
The company's success is heavily tied to Donald Trump. "We've never seen anything like this, not even with Apple and Steve Jobs," remarked Stegemoller. Given this, Trump signaling his intention not to sell is reassuring. If he changes his mind, he must disclose his decision within two business days and report it to the U.S. Securities and Exchange Commission (SEC).
Since the stock went public through a merger with a SPAC (Special Purpose Acquisition Company), Trump has been banned from selling his shares for six months due to the lock-up agreement. If the stock surpasses the important $12 mark at the end of trading today, this agreement will conclude. Yesterday, the stock plunged 3.22% to $15.62 on the NASDAQ. Regardless of how the stock price evolves, the restrictions will expire no later than September 25th.
Despite the expiration of the lock-up agreement today, allowing Donald Trump to sell his shares in Trump Media and Technology Group (TMTG), he has declared his intentions of not doing so. The potential impact on the stock price would be significant if Trump decides to sell his shares, as he owns a majority stake in the company.
