The parent company of the “Truth Social” platform in the United States, Trump Media & Technology Group, is set to end its stock lock-up period on September 19th. Former President Trump confirmed on Friday that he will not sell his shares after the lock-up period ends, causing the stock of Trump Media to surge significantly instead of the expected decline.
Speaking at a golf club in Los Angeles on Friday, Trump stated, “Many people thought I would sell my shares, …But I don’t want to sell my stake, I don’t need to sell my shares. I don’t need the money.”
“I see it as a channel to convey my voice,” Trump said of Truth Social. “For me, this is a very good platform for expressing myself.”
The stock lock-up period prohibits insiders from selling newly issued shares for six months after the public trading in March.
According to documents submitted to the U.S. Securities and Exchange Commission by Trump Media & Technology Group, Trump holds nearly 115 million shares. Based on Thursday’s closing price of $16.08, the total value of 115 million shares is approximately $1.85 billion.
Although Trump could make a substantial profit by selling his shares, the current value of the media company’s stock is well below its valuation from a few months ago. When the company first listed on Nasdaq in March this year, the stock price soared to a high of $79.38.
Following the conclusion of the first debate between Trump and Democratic presidential candidate Hillary Hope, Trump Media stock plummeted over 10% on Wednesday, but with Trump’s endorsement on Friday, the price surged by 29% at one point, ultimately closing with an 11.8% increase.
However, the stock price at Friday’s opening was still over 75% lower than before its listing in March.
According to regulatory filings, the social media company based in Sarasota, Florida, often operates at a loss. The company reported a loss of nearly $58.2 million last year, with revenue of only $4.1 million.
Many experts view Trump Media as a “meme stock,” believing that investors buying the stock are mainly betting on Trump’s political prospects, with the stock price less influenced by the company’s fundamentals. Trump Media has stated that the company’s business is partly dependent on Trump’s popularity. Analysts point out that Trump’s performance in the election will impact the stock price of Trump Media.
After being banned from Twitter and Facebook following the January 6, 2021, Capitol Hill incident, Trump created Truth Social as an alternative platform.