Trump’s Decision on Liquidating Shares in Trump Media: Financial and Political Implications

A Crucial Decision for Donald Trump

Donald J. Trump is at a significant crossroads. In just 10 days, the former president will be free to liquidate his substantial holdings in Trump Media & Technology Group — the publicly traded parent company of Truth Social, which has become his primary platform for communication and influence. A restrictive provision that has prevented him from selling any of his impressive 115 million shares is set to expire on September 19.

With his stake valued at approximately $2 billion, the potential gain is compelling, especially considering that Mr. Trump initially invested only a few million dollars into Trump Media, which was established shortly after his departure from the White House in early 2021. However, it’s important to note that the current worth of his shares has significantly declined since March when Trump Media made its much-anticipated debut on Wall Street.

The implications of a potential sale by Mr. Trump are multifaceted, encompassing both financial and political ramifications. Such an action would likely lead to a sharp decline in the value of Trump Media’s already volatile stock, thereby reducing the worth of whatever portion of his stake he retains. Additionally, a significant drop in share price could alienate the company’s more than 600,000 shareholders — many of whom are staunch supporters of the former president and active users of the platform.

“He has no compelling reason to sell, especially since he doesn’t seem to require the money,” remarked Greg Bowden, a 66-year-old day trader and avid supporter of Mr. Trump, who has invested in shares of Trump Media. “I don’t believe he would be foolish enough to jeopardize the loyalty of his base of supporters.”

Many investors in Trump Media are already facing significant losses due to a steep decline in share prices over the last several months. The introduction of a major seller like Mr. Trump into such a thinly traded stock could overwhelm the market, further complicating the situation.

• “It’s fundamentally a supply-and-demand issue: If you inundate the market with shares, you will struggle to find enough buyers,” explained Mike Stegemoller, a finance professor at Baylor University. “Shocking the market isn’t advisable, and I doubt he would act unwisely in this regard. His self-interest might ultimately align with the interests of the shareholders.”