Donald Trump is poised to reach a significant financial milestone, as he becomes eligible to convert his paper fortune from his social media venture into actual cash in just a month. The question on everyone’s mind is: will he choose to do so?
On September 20, the former president will be able to start selling portions of his $2.6 billion stake in Trump Media & Technology Group Corp. (DJTWW, DJT), a company that has seen its share price swing wildly since going public through a special-purpose acquisition company (SPAC) merger in March. Despite this opportunity, Trump has not indicated any plans to sell his shares in Trump Media, which owns and operates his social media platform, Truth Social.
Selling shares could potentially provide Trump with a significant influx of cash, but it could also open him up to criticism. Many of his detractors already accuse him of prioritizing personal profit over public service, and a large-scale sale of shares could reinforce that narrative. Additionally, such a move might alienate his loyal supporters, who have invested in the company’s stock, particularly during the surge of his presidential campaign earlier this year.
However, Trump is also facing an escalating legal battle, with mounting legal fees that a sale of shares could help alleviate. “It’s a complex situation,” says Michael Ohlrogge, an associate professor at New York University Law School who has extensively studied SPACs. According to Ohlrogge, Trump will need to carefully weigh the immediate financial benefits against his longer-term political ambitions, including a possible return to the White House.
As of now, representatives for Trump Media have not commented on the possibility of Trump cashing out his shares. Previously, they have dismissed reports about Trump’s potential exit from the company as “utterly baseless” and politically motivated, asserting that there has been no indication that he plans to sell.
Trump’s opportunity to sell shares will come after the expiration of a lockup period, which has so far barred insiders from offloading their holdings. This period is set to end on September 20, freeing Trump, who owns about 60% of Trump Media, to begin selling shares if he chooses. His co-founders, Andy Litinsky and Wes Moss—both of whom gained fame as contestants on The Apprentice—as well as Patrick Orlando, whose fund ARC Global Investments II LLC sponsored the SPAC merger, will also be able to sell their shares.
Since the SPAC deal closed on March 25, Trump Media’s shares have experienced extreme volatility, trading as high as $79.38 and as low as $22.18. Most recently, the stock closed at $22.24, giving Trump Media a market capitalization of $4.3 billion. If Trump were to sell a substantial number of shares, it could signal to the market a lack of confidence in the company’s future, potentially leading to a further decline in share price.
The volatility of Trump Media’s stock seems largely disconnected from the company’s underlying business, which is struggling. According to third-party trackers, user engagement on Truth Social has plateaued, and the company is losing money. In the first six months of the year, Trump Media reported losses of $344 million, largely due to paper losses on derivatives, while generating only $1.6 million in revenue.
Instead, the stock’s fluctuations appear to be driven by speculative retail trading, particularly among users on platforms like Reddit’s WallStreetBets and StockTwits. These trading frenzies can cause sharp price swings, but they can also fade just as quickly, leading to unpredictable and volatile stock performance. The recent decline in Trump Media’s stock price has coincided with a decrease in the implied probability of Trump winning the upcoming presidential election, according to betting markets like PredictIt. Trump’s chances have slipped from 69% last month to 46%, as Vice President Kamala Harris, now the Democratic nominee for president, has gained momentum.
Despite the uncertainties surrounding the company’s stock, selling shares could provide Trump with much-needed funds to cover his rising legal expenses. Trump is currently facing more than half a billion dollars in penalties after losing two lawsuits earlier this year, both of which he has appealed. He is also embroiled in an ongoing criminal prosecution related to his efforts to overturn the results of the 2020 presidential election.
The lockup period for Trump and other insiders is expected to end just days after Trump’s sentencing in his hush money trial, scheduled for September 18 in Manhattan. In this case, Trump faces the possibility of up to four years in prison for felony charges related to falsifying business records to conceal a payment to a porn star during the 2016 election.
The exact timing of when Trump and other insiders can sell their shares depends on the stock price. If the share price remains at or above $12 for 20 consecutive trading days starting on August 22, the earliest date for insider sales will be September 20. If the stock price falls below that threshold, insiders will be able to sell starting on September 26, regardless of the trading price.
“If Trump starts selling, it could have a significant impact on the stock price,” warns Matthew Tuttle, CEO of Tuttle Capital Management. “It’s going to come down to whether he needs the money.” As Trump navigates the financial and political challenges ahead, the decision to sell his shares in Trump Media will likely be one of the most consequential financial decisions he faces.
