Truth Social shares fall 15% as Trump gets closer to tapping shareholding
The Mobile Device Former Trump Truth Account Social A Donald President On Seen For Is
Shares in Donald Trump’s social media startup tumbled, extending a two-week slump, after the company took a first step toward allowing the former president and other insiders to capitalise on their stakes.
Trump Media & Technology Group, parent of Truth Social, filed to register shares, including those linked to warrants. The move could ultimately bring forward sales from insiders that are currently not permitted until September.
The shares slumped 15% at one stage in New York trade to their lowest level since January.
Warrants, which are tied to the stock and can be exchanged with cash for shares of the company also sank.
The company has had its market value slashed by more than $5bn (€4.7bn) from a peak after debuting in March.
The slump means the paper windfall for the former president has dropped to $2.3bn from more than $5bn in a matter of weeks. However, if the stock can hold above the $17.50 mark, Trump and insiders would be in line to get another 40 million shares to divvy up. Even after the latest slide, that so-called earnout would be worth $1.2bn.
The company registered as many as 146 million common shares, as well as up to 21 million shares that are issuable upon the exercise of warrants. The filing also registered up to 4 million warrants to purchase common stock. All securities being registered are either held by or underlie securities held by existing holders of Trump Media.