Shares of Donald Trump's media company fell

Shares of Donald Trump's media company dropped for the second consecutive session on Tuesday, as the end of restrictions on share sales by the former U.S. president and other insiders approached.

Trump Media & Technology Group, in which the Republican presidential candidate holds a 57% stake, declined 3.6%, bringing its losses for the week to 7%.

Donald Trump says he won’t sell his stake

Trump Media's stock surged 12% on Friday after Donald Trump announced he does not intend to sell his $1.9 billion stake in the company. This came as a relief following weeks of steady declines, which were partly due to concerns about the end of insider trading restrictions related to its stock market debut in March.

Newly listed companies often face stock pressure as lock-up periods end, due to fears that insiders might sell shares and overwhelm the stock market.

Trump Media, which operates the Truth Social app, saw its valuation soar to nearly $10 billion after its Wall Street debut, driven by retail investors and Trump supporters betting on his potential return to the presidency.

Insiders eligible to sell shares once the lock-up period ends include United Atlantic Ventures and Patrick Orlando, whose fund, ARC Global Investments II, helped sponsor the blank-check company that merged with Trump Media. Together, they hold about 11% of the company.

How has Trump Media’s stock been performing?

As of Tuesday, Trump Media’s market capitalization was $3.3 billion, with shares trading at $16.68, down roughly 75% from their peak of over $66 in March. The recent decline has been exacerbated by President Joe Biden's withdrawal from the reelection race and Trump’s slipping lead in opinion polls ahead of the November 5 election.

The company’s revenue is currently minimal, comparable to just two Starbucks locations, and it continues to burn through cash.

If Trump Media's stock remains at or above $12 through Thursday, insiders will be able to sell shares starting Friday. Otherwise, the earliest they can begin selling is September 26. After sitting above $60 in March, it has tumbled toward $16. A stock’s price is supposed to rise and fall with its prospects for making money, but critics say TMTG’s stock has instead tended to move with investors’ expectations for Trump’s re-election chances. It’s also been incredibly volatile, diving and soaring through pulse-raising swings day to day if not hour to hour. The stock has had 15 days since the start of April where it’s jumped or dropped more than 10%.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.