Shares of Trump Media & Technology Group (DJT, DJTWW) have seen a significant decline as the lock-up period preventing major investors from selling their shares has expired. This downturn marks a troubling trend for the company, which has struggled since its public debut.
Key Takeaways
- Trump Media’s stock fell nearly 7% on the first trading day after the lock-up period ended.
- Former President Donald Trump holds a near-60% stake in the company and has stated he does not plan to sell.
- The stock has dropped for five consecutive days, reaching its lowest level since going public.
Stock Performance Overview
The expiration of the lock-up agreement has led to a notable drop in Trump Media’s stock price. The company, which went public through a special purpose acquisition company (SPAC) in March, has faced volatility since its debut. On the first trading day after the lock-up, shares plummeted to approximately $13.73, valuing the company at less than $3 billion.
- Current Stock Price: $13.73
- Market Value: Less than $3 billion
- Trump’s Stake: Nearly 115 million shares, valued at approximately $1.6 billion on paper.
Historical Context
Since its public listing, Trump Media has experienced wild fluctuations in stock price, often influenced by news related to Donald Trump, who is also a Republican presidential candidate. The stock reached a high of $79.38 shortly after its debut but has since seen a dramatic decline.
- High Stock Price (March): $79.38
- Recent Low: $13.73
Implications of the Lock-Up Expiration
The lock-up period is a standard practice in IPOs, designed to prevent major stakeholders from selling their shares immediately after a company goes public. This period allows the market to stabilize before insiders can cash in. With the expiration of this agreement, many investors are now free to sell their shares, which could lead to further declines in stock price if a significant number choose to do so.
Future Outlook
Despite the current downturn, Trump has indicated he has no intention of selling his shares, which could provide some stability in the short term. However, the overall financial health of Trump Media raises concerns. The company reported a loss of nearly $58.2 million last year, with revenues of only $4.1 million, highlighting ongoing challenges in generating profit.
- Last Year’s Loss: $58.2 million
- Revenue: $4.1 million
Conclusion
The expiration of the lock-up period for Trump Media & Technology Group has led to a significant drop in stock price, reflecting broader concerns about the company’s financial viability and market performance. As the situation develops, investors will be closely monitoring both Trump’s actions and the company’s ability to recover from this downturn.