Trump Media & Technology Group’s shares (TMTG) plunged 7.4% on Wednesday, adding to a sharp decline which erased a large part of the early frenzy surrounding the company.
The last drop followed a file with the Securities and Exchange Commission (SEC) Tuesday evening, revealing that President Donald Trump is preparing to sell all his participation of $ 2.3 billion in the company.
The file has shown that TMTG plans to sell more than 142 million shares, in particular the personal participation of Trump of 114 million shares, which is currently held in a trust controlled by his son, Donald Trump Jr., while the company insisted in a press release that it was a “routine deposit” and that Trump was not yet sold, the president of the president in terms of investors Company, the company did not sell on the slide of the actions.
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TMTG’s descending spiral: from frenzy to free fall
TMTG, which has exploited Truth Social, has been declining regular for months, which allowed more than 40% of its value in 2024. The company, formerly considered as a key pillar of the post-president of Trump, had difficulty maintaining momentum after a first push of enthusiasm among retail investors.
When Trump launched Truth Social for the first time in 2022, it was presented as an alternative to the main social media platforms which had prohibited it after the attack of January 6, 2021 against the American Capitol. The company quickly attracted investors wishing to support Trump’s vision of a freedom platform. However, enthusiasm has since decreased, while the company continues to publish financial losses and has difficulty attracting a consumer public.
TMTG declared a net loss of $ 19.2 million in the third quarter of 2023, and despite around 650,000 shareholders, he did not obtain institutional support. The vast majority of its shareholders are small retail investors, with only around 2,100 investors with more than 5,000 shares.
Trump’s return to X raises questions about the future of Truth Social
A major factor that accelerated TMTG’s decline was Trump’s return to X (formerly Twitter), the platform where it once had more than 80 million followers. After the owner Elon Musk raised the ban on Trump at the end of 2022, speculation turned to that the president would abandon the social truth in favor of the much greater platform.
For months, Trump remained exclusive to Truth Social, but as his re -election campaign in 2024 intensified, the need to reach a wider audience has become obvious. In August 2023, Trump made his long -awaited return to X, posting for the first time since his reinstatement. This decision was largely interpreted as a sign that he was distanting himself from social truth.
The release of Trump from TMTG?
Trump’s potential stock of stock is the last indication that he could move away from the company he has founded. Although he has officially announced any intention to abandon Truth Social, his re -engagement with X suggests that he no longer sees him as his main megaphone online.
In September, Trump reassured investors that he did not intend to sell his shares, provoking the temporarily rise in TMTG’s action. However, trading was interrupted twice by the Nasdaq that day due to extreme volatility. At the time, Trump was unleashed in exchange, accusing him of “taking orders” from the dry and of interfere with his business.
Now, with the prospect that he unloaded all his participation, investors fear that TMTG will be faced with an uncertain future. The company has not yet shown that it can be viable without the direct involvement of Trump, and if it absorbs, this could point out a loss of confidence in the long-term perspectives of the platform.
The uncertainty of the market is developing in the middle of Trump’s pricing announcement
The drop in shares also occurs at a precarious time for the financial markets, because investors are preparing for the new “reciprocal” prices of Trump, which he should reveal during a white house Rose Garden ceremony later on Wednesday. The prices, which he nicknamed trade measures of the “Liberation Day”, should target foreign imports with new aggressive samples, a new feeling of market.
In the middle of this backdrop of uncertainty, TMTG problems appear far. The fate of the company remains closely linked to the political and commercial decisions of Trump, as it approaches a possible exit, the descending spiral of the stock can only accelerate.
