On Monday, shares of Trump Media & Technology Group dropped by 18.4% after the company announced plans to allow insiders, including former President Donald Trump, to sell their shares earlier than expected. The decision was made in a filing with the SEC, which revealed that the company will also allow the potential sale of millions of restricted shares held by investors through warrants that can be converted into common stock.
Trump Media & Technology Group recently became a publicly traded company through a SPAC merger with Digital World Acquisition Corp. on March 25. The company’s primary asset is Trump’s social media network, Truth Social. However, lockup periods and warrant restrictions are put in place to protect newer investors from insiders selling off their stakes all at once. With this amendment, around 21.5 million shares will be sold by insiders, potentially diluting existing shareholders by over 15%.
The anticipation of new shares flooding the market reflects the drop in the company’s shares. Some investors may have decided to sell their shares in response to the news, resulting in an 18% drop in the company’s stock price on Monday. Despite this, Trump Media & Technology Group remains committed to its mission of providing a platform for free speech and promoting conservative values online through its flagship social media network, Truth Social.
