The parent company of Donald Trump’s social media network, Trump Media & Technology Group, announced plans to allow insiders to sell their shares earlier than previously agreed upon. This decision caused shares of DJT to drop 18.4% on Monday.
In a filing with the SEC on Monday morning, Trump Media revealed intentions to permit the sale of millions of shares restricted by warrants held by investors. Additionally, the company plans to allow insiders, including former President Donald Trump, to sell their shares earlier than scheduled. Trump’s ownership stake of roughly 57% in the company is currently subject to a lockup period, restricting him from selling shares for about five more months.
Trump Media & Technology Group recently completed its SPAC merger with Digital World Acquisition Corp. on March 25, making it a publicly traded company. The primary asset of the company is Truth Social, Trump’s social media network.
The decision to allow insiders to sell shares earlier could lead to around 21.5 million shares flooding the market, potentially diluting existing shareholders by more than 15%. The 18% drop in shares reflects concerns about potential dilution and the impact on investors who may decide to sell in response to the news.
Investors are now left to assess the implications of this development as Trump Media & Technology Group navigates this decision. As this situation unfolds, it will be interesting to see how the market reacts to the possibility of increased selling pressure from insiders.