Trump Media Stock Hits New Lows After Lockup Period Expiration

Trump Media Stock Hits New Lows After Lockup Period Expiration

Shares of Trump Media & Technology Group (DJT) fell over 10% on Monday, reaching their lowest point since the company's public debut in March. The drop follows the expiration of the company's six-month lockup period, which had restricted early investors, including founder Donald Trump, from selling their shares.

Despite the expiration, Trump has stated he has no intention of selling his approximately 60% stake in the company, currently valued at $1.5 billion. “I have absolutely no intention of selling,” Trump reiterated at a press conference last week, adding that he uses the platform, Truth Social, to communicate directly with his audience.

The lockup period is typically designed to protect a new public company from volatility, giving it time to stabilize before significant sell-offs by early investors. Since the expiration last Thursday, DJT shares have dropped nearly 20%, far from their peak of $79 per share. The company now holds a market capitalization of about $2.5 billion, significantly lower than its post-IPO valuation, which had put Trump's stake at over $4.5 billion.

DJT went public in March via a merger with Digital World Acquisition Corp, a special purpose acquisition company (SPAC), but has faced turbulent market conditions since. News events have played a significant role in the stock's volatility. In June, shares surged briefly following a political debate, then fell again. More recently, Vice President Kamala Harris has been leading in polls, which has put additional pressure on the stock.

Adding to the challenges, Trump was found guilty in May of falsifying business records related to the 2016 presidential campaign, a verdict that contributed to a 5% drop in DJT stock at the time. His sentencing is scheduled for November 26.

Trump Media has struggled financially, with second-quarter reports revealing a net loss of $16.4 million, much of it tied to expenses from the SPAC deal. Revenues also declined to $837,000, a 30% drop year-over-year, raising further concerns about the company’s financial stability.

Since its public debut, DJT shares have fallen roughly 65%, reflecting broader concerns about the company's fundamentals and the competitive landscape of the social media industry.