Trump pledges not to divest from Trump Media, igniting investor excitement.
The recent fluctuations in Trump Media's market performance highlight the risks associated with investing in a company that is deeply tied to one individual.
TroibNews 
Donald Trump has asserted that he has no intentions of cashing out his significant stake in Truth Social's parent company, Trump Media & Technology Group.
However, Wall Street is skeptical.
In the two weeks following the former president's declaration that he wouldn't sell "because I don’t want to have my voice shut down," shares of Trump Media & Technology Group have experienced considerable volatility. Initially, the stock price surged, but it later dropped by 30 percent, reaching its lowest point since its market debut in March. The shares have since recovered some of those losses.
This dramatic fluctuation indicates a lingering concern among investors that insiders at Trump Media, including Trump himself, might decide to sell shares at any moment, potentially driving the stock further down. Currently, the GOP presidential nominee holds nearly 115 million shares in the company, valued at approximately $1.6 billion. Earlier this year, that stake peaked at about $6 billion.
“He’s, shall we say, a mercurial person,” observed Steve Sosnick, Chief Strategist at Interactive Brokers. “So it’s not 100 percent clear that he won’t change his mind — or hasn’t changed his mind.”
In a recent regulatory filing, one major shareholder, United Atlantic Ventures, disclosed that it had divested its position in Trump Media. Earlier this year, the firm, managed by Andrew Litinsky, a former contestant on Trump's "The Apprentice," owned over 7.5 million shares but now holds only 100.
A publicly traded social media company with a majority shareholder who is also a major presidential candidate seems like a promising investment, particularly with Election Day approaching. If Trump were to regain the presidency, Truth Social, the flagship asset of Trump Media, could become a vital source for journalists, congressional aides, and lobbyists who monitor his online activity, along with countless others eager to hear his thoughts.
Yet, the recent turbulence in Trump Media's stock highlights the risks associated with investing in a company so closely tied to one individual. Trump's outcome in the upcoming election could significantly impact the company's future.
"The calculus that investors are asking themselves is: Is he going to be reelected or not? And right now, it's a coin toss," noted Gene Munster, managing partner at Deepwater Asset Management in Minneapolis. "This is binary — there's no middle ground in this kind of investment. It's even hard to call it investing. This comes out to basically gambling on the election."
Munster added, “If you're an investor and you're looking at what's ahead, there is this massive unknown." He elaborated that even a hypothetical 50 percent chance of gaining 100 percent and a 50 percent chance of losing 100 percent represents a wager that many investors might shy away from.
Trump Media has infused its regulatory documents with alerts regarding how the former president's popularity and legal issues could affect the stock's performance. The share price often fluctuates in tandem with election-related news.
While Trump does not hold a director or executive position at the company, the board is comprised of several of his close advisors, including his son Don Jr., former U.S. Trade Representative Robert Lighthizer, and former SBA Administrator Linda McMahon, who is taking the lead on the Trump transition along with Wall Street veteran Howard Lutnick.
Upon going public, Trump Media's stock generated great enthusiasm among individual investors, many of whom were perceived to be purchasing shares to show support for Trump. The company's stock faced intensified struggles leading up to last week when a trading restriction on Trump and other insiders was lifted. After a brief rebound of over 15 percent earlier this week, shares fell again on Thursday, now down 82 percent from highs nearing $80 per share.
At this point, Trump can freely sell his shares but claims he has no intention to do so. When asked about his share plans during a recent press conference, he stated: "I have absolutely no intention of selling."
Shannon Devine, a spokesperson for Trump Media, mentioned that the company had $344 million in cash and cash equivalents as well as zero debt as of the end of June. She also pointed out a recent expansion into a new in-app streaming platform.
"With further innovations planned soon, TMTG is optimistic about our growth strategy," Devine said in an emailed statement.
The company has not yet responded to requests for comments regarding the United Atlantic Ventures filing.
Investors remain apprehensive. According to Matthew Tuttle, CEO of Tuttle Capital Management, if Trump does not win, it remains uncertain whether Trump Media will have enough to build upon.
"Even without Elon Musk, Tesla's got something," Tuttle remarked. "Without Trump, this stock has nothing."
Allen M Lee contributed to this report for TROIB News
However, Wall Street is skeptical.
In the two weeks following the former president's declaration that he wouldn't sell "because I don’t want to have my voice shut down," shares of Trump Media & Technology Group have experienced considerable volatility. Initially, the stock price surged, but it later dropped by 30 percent, reaching its lowest point since its market debut in March. The shares have since recovered some of those losses.
This dramatic fluctuation indicates a lingering concern among investors that insiders at Trump Media, including Trump himself, might decide to sell shares at any moment, potentially driving the stock further down. Currently, the GOP presidential nominee holds nearly 115 million shares in the company, valued at approximately $1.6 billion. Earlier this year, that stake peaked at about $6 billion.
“He’s, shall we say, a mercurial person,” observed Steve Sosnick, Chief Strategist at Interactive Brokers. “So it’s not 100 percent clear that he won’t change his mind — or hasn’t changed his mind.”
In a recent regulatory filing, one major shareholder, United Atlantic Ventures, disclosed that it had divested its position in Trump Media. Earlier this year, the firm, managed by Andrew Litinsky, a former contestant on Trump's "The Apprentice," owned over 7.5 million shares but now holds only 100.
A publicly traded social media company with a majority shareholder who is also a major presidential candidate seems like a promising investment, particularly with Election Day approaching. If Trump were to regain the presidency, Truth Social, the flagship asset of Trump Media, could become a vital source for journalists, congressional aides, and lobbyists who monitor his online activity, along with countless others eager to hear his thoughts.
Yet, the recent turbulence in Trump Media's stock highlights the risks associated with investing in a company so closely tied to one individual. Trump's outcome in the upcoming election could significantly impact the company's future.
"The calculus that investors are asking themselves is: Is he going to be reelected or not? And right now, it's a coin toss," noted Gene Munster, managing partner at Deepwater Asset Management in Minneapolis. "This is binary — there's no middle ground in this kind of investment. It's even hard to call it investing. This comes out to basically gambling on the election."
Munster added, “If you're an investor and you're looking at what's ahead, there is this massive unknown." He elaborated that even a hypothetical 50 percent chance of gaining 100 percent and a 50 percent chance of losing 100 percent represents a wager that many investors might shy away from.
Trump Media has infused its regulatory documents with alerts regarding how the former president's popularity and legal issues could affect the stock's performance. The share price often fluctuates in tandem with election-related news.
While Trump does not hold a director or executive position at the company, the board is comprised of several of his close advisors, including his son Don Jr., former U.S. Trade Representative Robert Lighthizer, and former SBA Administrator Linda McMahon, who is taking the lead on the Trump transition along with Wall Street veteran Howard Lutnick.
Upon going public, Trump Media's stock generated great enthusiasm among individual investors, many of whom were perceived to be purchasing shares to show support for Trump. The company's stock faced intensified struggles leading up to last week when a trading restriction on Trump and other insiders was lifted. After a brief rebound of over 15 percent earlier this week, shares fell again on Thursday, now down 82 percent from highs nearing $80 per share.
At this point, Trump can freely sell his shares but claims he has no intention to do so. When asked about his share plans during a recent press conference, he stated: "I have absolutely no intention of selling."
Shannon Devine, a spokesperson for Trump Media, mentioned that the company had $344 million in cash and cash equivalents as well as zero debt as of the end of June. She also pointed out a recent expansion into a new in-app streaming platform.
"With further innovations planned soon, TMTG is optimistic about our growth strategy," Devine said in an emailed statement.
The company has not yet responded to requests for comments regarding the United Atlantic Ventures filing.
Investors remain apprehensive. According to Matthew Tuttle, CEO of Tuttle Capital Management, if Trump does not win, it remains uncertain whether Trump Media will have enough to build upon.
"Even without Elon Musk, Tesla's got something," Tuttle remarked. "Without Trump, this stock has nothing."
Allen M Lee contributed to this report for TROIB News
