Trump media stocks under pressure: Insider sales cause unrest

Shares of Donald Trump's media company experienced their second consecutive loss streak on Tuesday, as restrictions on insider stock sales, including those of the former U.S. President, are soon set to expire. The Trump Media & Technology Group, 57% owned by the Republican presidential candidate, lost 3.6% in value, resulting in a total weekly loss of 7%. This contrasts with a 12% rise on Friday after Trump announced his intention not to sell his stake worth $1.9 billion. Typically, newly publicly traded companies face pressure on their stock prices before the end of "lock-up" restrictions, due to fears that insiders might sell their shares, flooding the market. Trump Media, known for the "Truth Social" app, experienced a surge following its stock market debut, with the company's value at one point rising to nearly $10 billion. This boost was mainly driven by retail investors and Trump supporters speculating on his potential success in the presidential election. Insiders allowed to sell at the end of the "lock-up" period include United Atlantic Ventures and Patrick Orlando, whose fund ARC Global Investments II backed the company. Together, they own 11% of Trump Media. On Tuesday, Trump Media's market capitalization was $3.3 billion, with the stock priced at $16.68—a decline of about 75% from the March peak of over $66. This downward momentum has accelerated in recent weeks after President Joe Biden announced he would not run for re-election, and Trump lost his lead in the polls ahead of the November presidential election. Particularly concerning are the company's low revenues, which, according to corporate statements, are equivalent to the revenue of just two Starbucks stores, while the company continues to burn through capital. If Trump Media's stock price stays at or above $12 per share until Thursday, Trump and other insiders can start selling their shares from Friday. Otherwise, they can begin selling from September 26.