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<ul class="summary-list"><li>A major Trump Media shareholder has sold nearly all of its company shares, an SEC filing showed.</li><li>The seller is United Atlantic Ventures, the investment partnership of two former "Apprentice" contestants.</li></ul><a target="_blank" class="" href="https://markets.businessinsider.com/stocks/djt-stock">Trump Media</a> shareholder United Atlantic Ventures has sold nearly all of its stake in the company, amounting to nearly 11 million shares. The move comes after the company's lock-up agreement expired on September 19.According to a Thursday <a target="_blank" href="https://www.cnbc.com/2024/09/26/trump-media-shareholder-dumped-more-than-7point5-million-shares.html">regulatory filing</a>, UAV now holds just 100 shares in the Truth Social parent company. It's an investing collaboration between Andrew Litinsky and Wes Moss, who were former contestants on Donald Trump's "Apprentice" reality show.The sale is the first known case of company insiders ditching Trump Media shares now that restrictions have expired.UAV initially held 7.5 million DJT shares as of March 25, the day the company completed a merger with blank-check company Digital World Acquisition Corp. A separate <a target="_blank" href="https://www.cnbc.com/2024/09/26/trump-media-shareholder-dumped-more-than-7point5-million-shares.html">SEC filing</a> shows that it was issued an additional 3.4 million shares on September 5.Given how volatile the Trump Media stock is, UAV may have received anywhere between $128 million and $170 million for its sale.After Litinsky and Moss helped Trump create the social media organization in 2021, their relationship with the presidential hopeful deteriorated. The pair has <a target="_blank" href="https://www.businessinsider.com/trump-media-company-cofounders-sue-scheme-dilute-shares-2024-3">gone to court against Trump Media</a>, accusing it of diluting their shares, and the company later <a target="_blank" href="https://www.businessinsider.com/trump-media-stock-price-spac-merger-djt-truth-social-lawsuit-2024-4">fired back with its own lawsuit.</a>For his part, Trump has <a target="_blank" href="https://www.cnbc.com/2024/09/13/trump-media-djt-not-selling-stock-pops.html">resolved to not sell any of his shares</a>, which amount to 56% of the company. Before he voiced this commitment earlier in the month, some <a target="_blank" class="" href="https://www.businessinsider.com/trump-dump-djt-stock-sell-lockup-truth-social-2024-8">speculated</a> that the former president may want to unload his holdings to gross billions in profit — especially as he continues to<a target="_blank" href="https://markets.businessinsider.com/news/stocks/trump-media-truth-social-kamala-harris-presidency-election-odds-meme-2024-8"> face massive legal fees</a> from past court cases.If Trump did decide to cash in on his shares, he'd rake in less than when the firm first went public. Since its March peak, DJT has dropped more than 78%. Many analysts consider it a meme stock, given that the firm's fundamentals do not justify its previous highs.

Trump Media insiders sell nearly 11 million shares after lock-up period expires

<ul><li>The market regulator has tightened some regulations for companies that are launching IPOs to protect investor interest and prevent volatility in stock prices.</li><li>Along with new norms for IPOs, <keyword id="35210" type="General" weightage="20" keywordseo="sebi" source="Orion">SEBI</keyword> has come up with stringent norms for winding up of a mutual fund scheme.</li><li>Check out our <a href="https://www.businessinsider.in/bi-newsletter">weekly explainers</a> on the hottest topics and <a href="https://www.businessinsider.in/newsletters_signup.cms">sign up</a> if you like them.</li></ul>India’s financial markets regulator has come up with a slew of measures to tighten the rules for companies coming out with an initial public offering (IPO) to protect investor interest and prevent volatility in such stocks. The new regulations pertain to change in lock-in period of anchor investors, utilisation of IPO proceeds, restrictions on large shareholdings and a cap on sale of promoter shares via IPO. This comes after shares of several IPOs including Paytm and Zomato facing huge volatility after anchor investors sold shares right after their 30-day lock-in period leading to a huge fall in the share price. Note that the share sale by big institutional investors shakes investors’ confidence, which can lead to hasty selling by investors. Securities and Exchange Board of India (SEBI) is trying to prevent this by increasing the lock-in period to 90 days from 30 days. Anchor investors can only sell 50% of their holding after 30 days. Anchor investors are institutional investors who are allotted shares just before an IPO opens for subscription. The market regulator has also addressed the ongoing trend of promoters selling their entire stake in the company through IPO. When promoters of companies or rather startups that are not doing well financially sell their entire stake in the company, it is bound to shake investor confidence in the IPO. From now, shareholders with over 20% stake can sell only half of its shares through the IPO. Here are the key changes put forward by SEBI: <ul><li>New regulation restricts large shareholders (with more than 20% stake) from selling their entire stake in the company. Now they can only sell half of their overall shareholding.</li><li>Companies can only use 25% of the IPO proceeds for unidentified acquisitions in the draft red herring prospectus (DRHP). This comes after companies not disclosing usage of IPO proceeds in detail.</li><li>Existing lock-in period of 30 days for anchor investors shall continue only for 50% of the holdings, the remaining 50% shares can only be sold after 90 days.</li><li>About 33% of the portion will be reserved for non-institutional investors (NIIs) with investment between ₹2 lakh - ₹10 lakh.</li><li>Remaining 66% of the portion will be reserved for NIIs with more than ₹10 lakh investment.</li><li>Winding up of mutual fund schemes would now be possible only after the consent of majority unitholders. </li></ul>SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/sebi-doesnt-want-mutual-funds-diving-into-crypto-assets-at-least-until-the-crypto-bill-is-finalised/articleshow/88563302.cms">India’s market watchdog warns mutual funds to stay away from crypto assets at least until regulations come in</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/urban-company-ola-uber-are-not-the-best-places-for-gig-workers/articleshow/88561764.cms">Urban Company is not the best place for gig workers anymore and Ola, Uber are the worst</a>

SEBI comes out with stringent norms to save IPO investors from losing big money

<ul><li><keyword id="12459829" type="UNKNOWN" weightage="60" keywordseo="rivian-stock" source="Orion">Rivian stock</keyword> plunged 22% on Monday after CNBC reported that Ford is selling millions of shares.</li><li>The expiration of <keyword id="7067009" type="UNKNOWN" weightage="60" keywordseo="rivian" source="Orion">Rivian</keyword>'s lock-up period means insiders can now sell shares in the company following its November IPO.</li><li><keyword id="7067009" type="UNKNOWN" weightage="60" keywordseo="rivian" source="Orion">Rivian</keyword> is down more than 80% from its peak, when the EV truck company was valued at $153 billion.</li></ul><a href="https://markets.businessinsider.com/stocks/rivn-stock">Rivian</a> stock plunged 22% on Monday as its early investors take advantage of the expiration of its lock-up period and sell millions of shares.CNBC <a href="https://www.cnbc.com/2022/05/08/ford-is-selling-8-million-rivian-shares-sources-say.html">reported over the weekend</a> that <a href="https://markets.businessinsider.com/stocks/f-stock">Ford</a> is selling 8 million of its Rivian shares through a block trade with <a href="https://markets.businessinsider.com/stocks/gs-stock">Goldman Sachs</a>. Ford owned about 12% of the electric truck manufacturer, or about 102 million shares, prior to the sale.Meanwhile, <a href="https://markets.businessinsider.com/stocks/jpm-stock">JPMorgan</a> is selling a block of 13 million to 15 million Rivian shares for an unknown seller, CNBC reported. Both share blocks are priced at $26.90, which represents a 6.7% discount to Friday's close. <keyword id="12459829" type="UNKNOWN" weightage="60" keywordseo="rivian-stock" source="Orion">Rivian stock</keyword> fell 19% to $23.32 in Monday trades.The unknown seller could be <a href="https://markets.businessinsider.com/stocks/amzn-stock">Amazon</a>, which owns about 18% of Rivian, or about 158 million shares, and was an early investor in the company. Both Ford and Amazon revealed billion-dollar losses related to their Rivian stakes in their most recent earnings calls. Rivian went public in November and saw its valuation peak at $153 billion. The company was briefly worth more than Ford despite it having delivered just a couple thousand vehicles since its inception.But supply chain disruptions have led Rivian to <a href="https://www.businessinsider.com/lucids-price-hike-will-test-customer-loyalty-tesla-rivian-2022-3">delay some of its deliveries and raise prices on its flagship car</a> by more than $10,000. That, combined with rising interest rates, have led investors to focus more on valuations and less on growth at any price. Rivian's valuation has fallen to just $23 billion today.Lock-up periods often last about six months after a company goes public. The period prevents company insiders and early investors from selling their shares.

Rivian plunges 22% as Ford and other investors to sell millions of shares as lock-up period expires

<div class="KonaFilter image-container display-table"><div><div class="image on-image">AP Photo/Bebeto MatthewsBrendan Kennedy, third from right in front, CEO and founder of British Columbia-based Tilray Inc., a major Canadian marijuana grower, leads cheers as confetti falls to celebrate his company's IPO (TLRY) at Nasdaq, Thursday, July 19, 2018, in New York.</div></div></div><ul><li><a href="https://markets.businessinsider.com/stocks/tlry-stock?utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Tilray</a> plunged more than 10% Tuesday after its initial-public-offering lock-up period expired, allowing early investors to sell shares from its <a href="https://www.businessinsider.com/ap-canadian-marijuana-company-tilray-has-first-us-pot-ipo-2018-7">July public listing</a>. </li><li>IPO lock-up refers to the 90- to 180-day window after a company has gone public when insiders - including company executives, founders, employees, and venture funds - are barred from selling their shares.</li><li>The purpose of an IPO lock-up is to ensure that shares owned by these insiders don't enter the public market too soon after the offering, according to the regulators.</li><li>Companies can use the lock-up period to post up to two consecutive earnings report, clarifying its business operations and outlook.</li><li>When the lock-up expiration nears, investors who are concerned about a potential price drop may hedge their position, through ways such as buying options.</li></ul>The cannabis producer <a href="https://markets.businessinsider.com/stocks/tlry-stock?utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Tilray</a> plunged more than 10% Tuesday <a href="https://markets.businessinsider.com/news/stocks/tilray-stock-price-post-ipo-lock-up-expires-2019-1-1027869490">as the lock-up period following its initial public offering expired.</a>But what exactly is an initial-public-offering lock-up period, how long is it, and why were Tilray shares getting hit when it expired? To fully understand how the lock-up period and its expiration may impact investors it's important to understand the mechanics of the lock-up and the rationale for having one. <h2>What is an IPO lock-up period?</h2>The <a href="https://www.sec.gov/fast-answers/answerslockuphtm.html">US Securities and Exchange Commission</a> regulates that company insiders who acquire shares of a company before it goes public are barred from selling their holdings for a set period of time. Regulators may also limit the number of shares that can be sold over a designated period of time. Insiders can be company executives, founders, employees, venture funds or other early private investors. This waiting period, called the "lock-up period," usually lasts 90 to 180 days after the company has gone public. For example, <a href="https://www.businessinsider.com/ap-canadian-marijuana-company-tilray-has-first-us-pot-ipo-2018-7">Tilray began trading on the Nasdaq on July 19</a>, and its lock-up period was for the 180 days after its IPO.Usually, once the lock-up period expires, most trading restrictions do not exist. <h2>Why there is a lock-up period?</h2>The purpose of an IPO lock-up is to ensure that shares owned by these insiders don't enter the public market too soon after the offering, according to the regulators.This cooling-off period can help reduce the volatility of the new stock and allow for the market to price shares based on natural supply and demand. Typically, company insiders own a lot more shares compared to the public market. Therefore, if large shareholders are allowed to off load holdings immediately after the company goes public, their selling activities could drastically depress the stock's price. And that's why a company's stock price usually drops when the lockup expires. But the price change won't be too unpredictable then as the company can use the lock-up period to post up to two consecutive earnings reports, clarifying its business operations and outlook.<h2>What can investors do when the lock-up period expires?</h2>Usually, when a lock-up expiration approaches, insiders need to decide whether to sell their shares and book the profits or losses or to stick it out. Investors who are concerned about a potential price drop may hedge their position, through ways such as buying options.And outsiders may short the stock, or betting against it, as they anticipate the price to drop. That's also why a stock's borrowing cost usually rises when the lock-up expiration nears. <h3>Now read:</h3><ul><li><a href="https://www.businessinsider.com/consumer-packaged-goods-executives-are-turning-to-cannabis-2018-11?r=markets-insider?utm_source=markets&amp;utm_medium=ingest?r=markets-insider" target="_blank" rel="noopener">These execs are leaving behind careers at companies like Coke and Victoria's Secret to tap into the $194 billion marijuana industry</a></li><li><a href="https://www.businessinsider.com/millennials-are-ditching-beer-for-pot-so-expect-to-see-deals-2019-1?r=markets-insider?utm_source=markets&amp;utm_medium=ingest?r=markets-insider" target="_blank" rel="noopener">Marijuana could be the biggest growth opportunity for struggling beverage-makers as millennials ditch beer for pot</a></li><li><a href="https://www.businessinsider.com/aurora-cannabis-will-unveil-plan-to-produce-cbd-for-us-market-2019-1?r=markets-insider?utm_source=markets&amp;utm_medium=ingest?r=markets-insider" target="_blank" rel="noopener">Aurora Cannabis is gearing up to break into the $1.6 billion CBD industry in the US</a></li></ul> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/costco-food-court-bbq-brisket-hot-dogs-pizza-churros-2017-6">We tried the Costco food court and it totally blew us away</a></h3> <div> </div> </div>

Tilray is getting slammed as its IPO lock-up period expires. Here's what an IPO lock-up period means.

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Associated PressFILE - In this Feb. 7, 2019, file photo, a bud tender shows a top cannabis strain at Serra, a dispensary in Portland, Ore. In an attempt to reduce the marijuana inventory in Oregon, the state is moving toward allowing the Oregon Liquor Control Commission to refuse to issue initial marijuana production licenses, based on supply and demand. (AP Photo/Richard Vogel, File)</div></div></div><ul><li><a href="https://markets.businessinsider.com/stocks/tlry-stock">Tilray</a> shares traded up as much as 13% Monday after the company announced a deal to extend the lock-up period with its main shareholder. </li><li>The deal establishes that Privateer Holdings, which owns 77% of Tilray's shares outstanding, will release shares to the public over a two-year period. </li><li>When the 180-day lock-up expired in January, shares of Tilray tanked. </li><li><a href="https://markets.businessinsider.com/stocks/tlry-stock?utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Watch Tilray trade live.</a></li></ul>Shares of <a href="https://markets.businessinsider.com/stocks/tlry-stock">Tilray</a>, the Canadian cannabis producer, were up as much as 13% in early trading Monday after the company announced that it extended the share lock-up period of a major shareholder. Tilray said in a<a href="https://www.businesswire.com/news/home/20190610005288/en/"> press release out Monday</a> that it has signed a non-binding letter of intent with Privateer Holdings, Inc., which owns 75 million shares, or 77% of the outstanding total. The letter of intent also establishes that Tilray and Privateer will join in a downstream merger. The deal means that Privateer can only sell its shares under certain circumstances over a two-year period. In the first year, only Privateer can only sell to institutional and strategic investors determined by Tilray, and at a staggered rate in the second year. This will ensure that Tilray shares will be released to the market over time, instead of all at once.Tilray CFO Mark Castaneda said that the transaction will give the cannabis producer "greater control and operating flexibility" while allowing the company to manage its float, or the amount of shares that are held by public investors. Tilray has 80.6 million shares outstanding and a float of 22 million shares, according to Bloomberg. The move is an important one to protect the share price of the company, which last July was the first cannabis company to list on the Nasdaq. Shares <a href="https://markets.businessinsider.com/news/stocks/tilray-stock-price-post-ipo-lock-up-expires-2019-1-1027869490?utm_source=markets&amp;utm_medium=ingest">plummeted in January</a>, when the <a href="https://markets.businessinsider.com/news/stocks/initial-public-offering-lock-up-period-what-it-means-2019-1-1027870283">180-day lock-up period expired</a> and early investors decided to cash out on the stock's early success. They were up 328% at the end of the lock-up period, and have since fallen by 62% to $43 apiece. "We believe this structure will maximize overall returns for our visionary investors in a tax-efficient manner while giving Tilray the operating flexibility it needs to continue to be a leader in the rapidly emerging global cannabis industry," said Michael Blue, managing partner of Privateer, in a company statement. The Privateer shares offered to the market are expected to be a tax-free deal for investors. "The transaction effectively flips the control of stock from Privateer to TLRY, and provides TLRY increase ability to manage its public float," wrote Cowen analysts Vivien Azer and Steven Schneiderman in a note out Monday. They maintained their "outperform" rating and $150 price target. Shares of other cannabis companies were also trading up in early trading. Cronos was up more than 3%, Aurora Cannabis traded up 2.36% and Canopy Growth traded up 2.23%. Tilray is down <a href="https://markets.businessinsider.com/stocks/tlry-stock">45% this year.</a><div class="KonaFilter image-container display-table"><div><div class="image on-image"><a href="https://markets.businessinsider.com/stocks/tlry-stock"></a>Markets Insider</div></div></div> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/is-college-a-waste-of-time-and-money-bryan-caplan-2018-2">College is wasting time and money, according to George Mason University economics professor</a></h3> <div> </div> </div>

Tilray spikes after extending the lock-up period with its largest shareholder

<keyword id="6355199" type="UNKNOWN" weightage="20" keywordseo="Reliance-Industries">Reliance Industries</keyword> Chairman <keyword id="3820" type="UNKNOWN" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword> had announced a refundable security deposit of Rs 1500 while rolling out the <keyword id="4792220" type="ORGANIZATION" weightage="100" keywordseo="jiophone">JioPhone</keyword>. He said the deposit will be refunded after three years, making the JioPhone free for the customers. As per the latest development, it is likely that Reliance may roll out a partial refund of the security deposit before the three-year lock-in period. The pre-booking of 4G feature phone, rolled out by <keyword id="6354504" type="PERSON" weightage="100" keywordseo="reliance-jio">Reliance Jio</keyword>, will begin from August 24 and as per various reports, the telecom operator is mulling over partial roll out scheme. Reportedly, Jio may announce the terms of the refund scheme in the next few days. Reliance Jio is considering whether the refund policy and additional monthly tariff of Rs 153 would be attractive enough for users to switch to JioPhone or not. According to a Goldman Sachs report, subscribers who pay Rs 1,500 as deposit for three years for a phone and pay Rs 164 per month are two mutually exclusive sets.

Reliance Jio may give you part refund on JioPhone before 3-year lock-in period. Here are the details

<ul class="summary-list"><li>Investors accuse Florida businessman Patrick Orlando of diverting millions of Trump Media shares from them.</li><li>Orlando was the CEO of the blank check firm that helped take Trump Media public.</li></ul>Investors have accused the ex-CEO of the blank check firm that helped take the parent company of President-elect <a target="_blank" class="" href="https://www.businessinsider.com/donald-trump-election-victory-impact-investments-costs-housing-taxes-childcare-2024-11">Donald Trump's</a> social media site public of stiffing them out of million of shares.The plaintiffs — more than three dozen investors — allege in a new lawsuit against Florida businessman Patrick Orlando that he "engaged in malicious and intentional self-dealing of monumental proportions to the tune of potentially hundreds of millions of dollars" by diverting assets to himself and his family through entities including an offshore shell company.The plaintiffs say in the lawsuit that they are founding members of Orlando's <a target="_blank" class="" href="https://www.businessinsider.com/trump-dump-djt-stock-sell-lockup-truth-social-2024-8">ARC Global Investments II</a> entity, the sponsor of a SPAC that merged with <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.businessinsider.com/donald-trump-truth-social-resignation-whistleblower-propublica-2024-10">Trump Media &amp; Technology Group</a> to take it public earlier this year. Orlando was the CEO and chairman of the SPAC, <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/digital-world-acquisition-corp-and-trump-media-technology-group-corp-announce-completion-of-business-combination-1033193991">Digital World Acquisition Corporation</a>.The lawsuit, filed Tuesday in Delaware's Chancery Court, alleges that Orlando and ARC Global have failed to transfer what is owed — roughly 75% to 80% of the total approximate 8.1 million shares of stock in Trump Media that ARC Global owns — to the plaintiffs.Trump Media is the operator of Trump's social media platform, <a target="_blank" class="" href="https://www.businessinsider.com/donald-trump-truth-social-tmtg-stock-wealth-election-harris-x-2024-9">Truth Social.</a>Orlando, his attorneys, and attorneys for ARC Global did not immediately respond to requests for comment from Business Insider on Thursday.The lawsuit accuses the defendants of "coordinated and intentional theft of stock" and "egregious breaches of fiduciary duties" by Orlando.Orlando, the lawsuit alleges, "orchestrated a scheme with the other Defendants to divert the majority of ARC ownership interest to himself and his family through a closely held alter-ego entity named Franlu LLC" and a Cayman Islands-based entity called Belsize Ventures Ltd. Franlu and Belsize are also named as defendants in the lawsuit."In doing so, Orlando intentionally breached his fiduciary duties owed to Plaintiffs by diluting the ownership interests of the Plaintiffs," the lawsuit says. "Specifically, as Managing Member of ARC, Orlando conveyed roughly 46% of ARC's membership interest to Franlu in a secret transaction for zero consideration in exchange."The lawsuit alleges that ARC Global is diverting shares to Orlando and his "inner circle" and "liquidating remaining shares to fund Orlando's own legal defense efforts and other personal expenses on a commingled basis with ARC's own assets.""While claiming that ARC was not in position to distribute shares, Orlando has been enriching himself through a series of lavish purchases, including a brand new six-million-dollar home in Miami, from the proceeds of TMTG stock that he misappropriated," the lawsuit alleges.To date, the plaintiffs have received only a "meager fraction" of the Trump Media shares they say they are owed by ARC Global under the terms of their subscription agreements, the lawsuit says.The merger that allowed Trump Media to trade under the stock ticker DJT was completed in March, with the lock-up period ending in September, the lawsuit says."Even assuming the lock-up period stood as the hurdle to Plaintiffs receiving their Founder Shares, the lock-up period ended over one month ago," the lawsuit says.The lawsuit says that in September, Orlando emailed ARC Global members, including the plaintiffs, "claiming that 'ARC has matters that must be addressed before equity distributions are made.""As examples, Orlando listed certain 'liabilities of ARC,' including 'bona fide creditors, such as professional advisors or noteholders, as well as costs imposed upon ARC through litigation,'" the lawsuit says.The lawsuit says that Orlando emailed ARC Global members again in October "stating that '[i]nitial distributions [were] in progress,' but that 'further distributions' were only 'expected in the future.'""Orlando's email again alludes to 'attacks' on ARC and the need to 'defend itself,' without providing any explanation for how such 'attacks' affect ARC's ability to tender to subscribing investors their TMTG shares," the lawsuit continues.The <a target="_blank" class="" href="https://www.businessinsider.com/sec-sues-ex-ceo-spac-helped-trump-media-for-fraud-2024-7">Securities and Exchange Commission sued Orlando</a> in July, alleging that he "falsely represented" that his blank check company, Digital World Acquisition Corp., did not intend to merge with any specific company."Orlando knew these statements were false because he had personally engaged in numerous lengthy discussions with representatives of Trump Media &amp; Technology Group Corp," the SEC said in the lawsuit.The group of investors who filed the latest lawsuit against Orlando are seeking to recover their "rightful portion" of the 8.1 million stock shares, "nullify improper transactions," and monetary damages.Trump Media's stock rose 5.9% Wednesday after <a target="_blank" rel="noopener noreferrer" class="c-link" href="https://www.businessinsider.com/election-results-trump-harris-presidential-election-2024-11">Trump defeated Vice President Kamala Harris</a> in the presidential election but dropped 23% Thursday, closing at $27.70.

Investors accuse the ex-CEO of the company that helped take Trump Media public of stiffing them out of millions of shares

<ul class="summary-list"><li>Shares of Trump Media &amp; Technology Group — the company that runs Trump's Truth Social app — have plummeted.</li><li>Trump Media/Truth Social is a meme stock, so that's not a total shock.</li></ul>Earlier this year, Donald Trump's social media company was worth something like $9 billion.But that was then, and its stock has been sinking since: Now investors think Trump Media &amp; Technology Group Corp — the company that runs Truth Social, Trump's Twitter clone — is worth a mere $4 billion. Today its stock closed at just above $20 a share, the lowest it has been <a target="_blank" href="https://markets.businessinsider.com/news/stocks/trump-media-stock-price-soars-djt-ticker-symbol-truth-social-2024-3?_gl=1*1gh02oc*_ga*MTU4NjA1NzkzMy4xNzE3NjgzMjMy*_ga_E21CV80ZCZ*MTcyNDg3MzU0MS4xOTAuMS4xNzI0ODc0MzYwLjYwLjAuMA..">since the company had its equivalent of an IPO in March</a>.What's going on?To start, a caveat we've mentioned before: DJT is a meme stock. Investors aren't valuing it based on <a target="_blank" href="https://www.sec.gov/ix?doc=/Archives/edgar/data/0001849635/000114036124036633/ef20030085_10q.htm">the company's financials</a>, <a target="_blank" href="https://www.businessinsider.com/trump-media-short-interest-meme-stock-gamestop-2024-3">which are very meager at best</a>. They think it's worth something because other people think it's worth something, and that collective fantasy will work right up until it doesn't.So trying to figure out <a target="_blank" href="https://www.businessinsider.com/trump-media-truth-social-users-disclose-financials-djt-2024-4">why DJT</a> is moving up or down on any given day isn't likely to lead to a satisfactory answer. Mostly you're going to get something along these lines: ¯\_(ツ)_/¯Still. We can at least acknowledge that DJT has been sliding for quite some time. So there's something going on.One reason Trump's stock may be moving down is that lots of people who own Trump stock are Trump fans, and/or people betting that Trump will win the November election. But it has been harder to be in one of those groups recently: Since Kamala Harris replaced Joe Biden as Trump's opponent, <a target="_blank" href="https://www.businessinsider.com/nate-silver-kamala-harris-donald-trump-prediction-risk-book-interview-2024-8">Trump has been losing ground in the polls</a>, and now both <a target="_blank" href="https://www.nytimes.com/interactive/2024/us/elections/polls-president.html">The New York Times</a> and <a target="_blank" href="https://www.natesilver.net/p/nate-silver-2024-president-election-polls-model">pollster Nate Silver</a> see him as a slight underdog.So if DJT is a proxy for Trump's election chances, it would make sense that it has been limping recently.The other very plausible reason that Trump stock is moving down is that investors may be worried about Trump selling some of his shares in the company. This could lead to other investors selling, which would have a cascading effect on the share price.Trump currently owns about 60% of Truth Social, which means his stake is worth about $2.4 billion. He's been restricted from selling any shares because of a lock-up restriction, which are common in public offerings. But <a target="_blank" href="https://www.cnbc.com/2024/08/22/trump-djt-stock-sell-off-media.html">the lock-up period could end as soon as September 20</a> — hence people trying to get out of the stock before he does.There are two arguments against that theory, by the way: The first is that the lock-up period has been public knowledge since Truth Social first went public, so why bail now? The second is that Trump knows that if he does sell stock — and particularly if he sells a lot of stock — that the stock will really collapse. Because all but the most die-hard Trump fans will see it as the end of the company.So there's a real tension there: Does Trump keep his theoretical $2.4 billion stake intact? Or does he try to turn it into actual money, and risk making the overall value much less?In any case, it's possible that both of the ideas above — Trump's declining political fortune, and the idea that he may be ready to trigger a big sell-off himself — are true. Or maybe there's something else at work that we have yet to see.The only thing we know for certain is that if you bought Trump stock in late March and haven't sold it since then, you are down by more than 50%. We don't give investment advice around here. But <a target="_blank" href="https://www.businessinsider.com/trump-media-stock-price-crash-spac-djt-truth-social-2024-4">don't say we didn't warn you</a>.

Trump's social media stock is tanking. Here are 2 possible reasons.

<ul class="summary-list"><li>Trump Media shares have plunged 70% since going public in March.</li><li>The company is still carrying a market value of roughly $3 billion.</li></ul>Shares of <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/djt-stock">Trump Media</a> have plunged 70% since the company went public in March. Even after that sell-off, it's carrying a market value of roughly $3 billion, a figure one expert says is still too high."According to Bloomberg data they had sales of $837,000 last quarter and a net loss of $16.4 million. The numbers don't jive," Jay Woods, chief global strategist at Freedom Capital Markets, told Business Insider.He added that its current valuation "seems unjustifiable."One traditional valuation metric — price-to-sales ratio — is currently at 1,864 times, with the company generating revenue of less than $2 million in the trailing twelve months.In addition to the eye-watering valuation, Woods said Truth Social's growth has limited upside due to its political nature."They struggle with user retention and growth and the upside seems limited — especially if he loses the election," Woods said. "His relevance and age will play a role as will the fact that this never became the social playground for anything outside of politics."Another lingering issue weighing down Truth Social stock is Trump's increasingly frequent use of its biggest competitor, X, formerly known as Twitter.There's also the recent <a target="_blank" class="" href="https://www.businessinsider.com/trump-dump-djt-stock-sell-lockup-truth-social-2024-8">end of a lock-up period</a> for insiders to sell shares, which could put further pressure on shares.The offloading has already begun, with United Atlantic Ventures — an investment partnership run by two former contestants of Trump's "Apprentice" reality show — <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/trump-media-insiders-litinsky-moss-donald-trump-truth-social-djt-2024-9">dumping nearly their entire 11-million-share stake</a> in the company for proceeds exceeding $100 million.There's also the risk that Trump himself will decide to sell some or all of his 57% ownership stake, although he's previously said he won't do so. But there's no guarantee he won't change his mind."If there was to be a fire sale by its number one shareholder, that could cause a panic with other insiders holding shares and lead to a major leg lower," Woods said.

Trump Media stock is down 70% since going public. One expert says its $3 billion valuation is still 'unjustifiable.'

<ul class="summary-list"><li>The value of Donald Trump's Truth Social stake has tanked by about $4 billion since May.</li><li>The ex-president may face further declines when stock-selling restrictions ease later this month.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/who-is-donald-trump-bio-age-family-key-positions-2019-4">Donald Trump</a> has seen about $4 billion wiped off the value of his Truth Social stake since May — and could suffer further losses once selling restrictions on the stock are lifted later this month.The former president owns about 115 million shares of Trump Media &amp; Technology Group, Truth Social's parent company. It <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/trump-media-stock-price-soars-djt-ticker-symbol-truth-social-2024-3">went public</a> in March after merging with a special-purpose acquisition vehicle.TMTG shares hit an intraday high of $79 on their market debut, and still traded around $54 on May 9, but have <a target="_blank" class="" href="https://www.businessinsider.com/trump-media-truth-social-stock-down-lockup-polls-2024-8">crashed</a> 68% since then to hover around record lows of $17.The <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/trump-media-djt-stock-price-presidential-election-forecast-kamala-harris-2024-8">heavy sell-off</a> has cut the right-wing social media company's market value from about $10 billion in May to below $3.5 billion. It has slashed the value of Trump's roughly 60% holding from about $6 billion to $2 billion over the same period.The <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/trump-media-truth-social-kamala-harris-presidency-election-odds-meme-2024-8">downturn reflects a shake-up</a> of the presidential race with Kamala Harris replacing Joe Biden as the Democratic nominee. Harris is widely seen as a greater threat to Trump's reelection chances — the pair are virtually tied in recent polls, whereas Trump held a steady lead over Biden.Trump has also <a target="_blank" class="" href="https://www.businessinsider.com/trump-twitter-account-tweets-ad-campaign-musk-2024-8">resumed posting</a> after a yearslong hiatus on Elon Musk's X, which is arguably the biggest rival to Truth Social. The ex-president's use of his own social media site instead of the platform formerly known as Twitter was seen as one of its biggest strengths — especially if he were to regain office.<h2 id="3838a405-fc89-4192-b316-ac6e95bc1cdf">Fast fall</h2>Trump's TMTG stake <a target="_blank" class="" href="https://www.businessinsider.com/meme-stocks-mania-donald-trump-tmtg-truth-social-hasbro-paramount-2024-3">briefly catapulted</a> him into the top 300 of the world's 500 wealthiest people as measured by the Bloomberg Billionaires Index. The rich list estimated his net worth above $7 billion in late March, <a target="_blank" class="" href="https://www.businessinsider.com/trump-wealth-tmtg-dwac-billionaires-stock-court-judgment-rich-list-2024-3">ranking him</a> above the likes of George Soros, Mark Cuban, Giorgio Armani, Reed Hastings, and Bernie Marcus.But the Republican presidential candidate <a target="_blank" class="" href="https://www.businessinsider.com/donald-trump-rich-list-meme-stock-crash-truth-social-tmtg-2024-4">quickly fell off</a> the index once TMTG shares sank. Forbes pegs his current net worth below $4 billion — and Trump is not rich enough to still make the Bloomberg list.Trump's fortune could shrink further as the lock-up period on TMTG insiders selling shares expires later this month, threatening to push down the stock price even more.The real-estate mogul might cash out some of his shares, but Trump faces constraints on how fast he can sell, and will have to make public regulatory filings when he reaches certain thresholds.

Trump takes near-$4 billion hit on Truth Social since May — and the stock faces a fresh selling spree

<ul class="summary-list"><li>Betting odds favor Trump winning the November election, with Polymarket odds at 59.5%.</li><li>Trump's odds rebounded from the weakness seen immediately after his debate performance last month.</li></ul>The Trump trade has been regaining momentum as betting odds rise in favor of the former President winning the election in November.Betting market websites like Polymarket and Kalshi have swung to Trump's favor significantly since early October.With nearly $1 billion wagered on the outcome of the Presidential election at Polymarket, Trump shows a 59.5% chance of winning compared to 40.3% for Harris at 12:17 p.m. ET on Wednesday.The Trump trade in markets weakened after the mid-September debate between Kamala Harris and Trump, as Harris was <a target="_blank" class="" href="https://www.businessinsider.com/trump-debate-loss-harris-next-campaign-election-2024-9">largely viewed as the winner</a> of their one-and-only meeting.If you overlay a chart of Trump's odds of winning the election in November with individual components of the Trump trade, it's highly correlated.Here's what's moving in markets that suggest the Trump trade is back on as investors bet on a victory for the former president.<h3 id="9f9993a8-64f4-4e09-b148-15ee2915d297">Trump Media stock</h3>The parent company of Donald Trump's <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/djt-stock">Truth Social</a> has seen its stock price soar 87% since Trump gained a favorable edge in the betting markets on October 4. The stock was up almost 11% on Wednesday, trading at $29.93.The shares slid in September around the time of the Harris-Trump debate and as investors grew nervous about the expiration of a lock-up period that would allow insiders, including Trump, to sell shares.Trump has said he would not sell down his nearly 60% stake in the company.<h3 id="0116e3cd-5bf0-423f-8ecf-722a10591bd6">Bitcoin</h3>The price of bitcoin is up 11% since Trump's victory odds began rising in the betting market on October 4. In recent years, Trump's <a target="_blank" class="" href="https://www.businessinsider.com/trump-pac-raised-millions-crypto-donations-since-june-2024-10">warm embrace of the crypto world</a> has turned bitcoin into a Trump trade.Bernstein analyst Gautam Chhugani believes bitcoin <a target="_blank" class="" href="https://markets.businessinsider.com/news/currencies/bitcoin-price-outlook-90000-target-if-trump-wins-november-election-2024-9">could surge to $90,000 if Trump wins in November.</a>"Elections remain hard to call, but if you are long crypto here, you are likely taking a Trump trade," Chhugani said in a note last month.<h3 id="b64ab350-5ae1-4eb5-a208-d4e8716432df">The dollar</h3>The US dollar has surged so far this month, rising nearly 3% against a basket of other currencies.Trump's policy proposal of a universal tariff of 20% is seen as inflationary and would likely spark a rise in interest rates, which in turn would likely boost the US dollar."Should he re-take the White House in November, the dollar would probably rally sharply, at least in the near term, on expectations of higher US tariffs and interest rates," Capital Economics said in a note last month.<h3 id="e66790c5-f3a3-48ee-951a-95f989955c63">Bank stocks</h3>Trump has promised a wave of deregulation if he's elected as the 47th President of the United States, and one industry that Washington DC heavily regulates is the banks.<a target="_blank" class="" href="https://www.reuters.com/markets/us/if-trump-wins-he-plans-free-wall-street-burdensome-regulations-2024-04-12/">Allies of the former president have said</a> he aims to unburden banks from many of the regulations that came into effect following the 2008 financial crisis, something that his first administration had tried to do with mixed success.A looser regulatory approach more broadly could also ignite a fresh wave of mergers and acquisitions, as a Trump administration would likely be less focused on antitrust than the Biden White House. More M&amp;A could boost big bank revenues and help drive up profits from dealmaking.The SPDR S&amp;P Bank ETF has surged 9% since October 4, while the SPDR S&amp;P Regional Banking ETF is up about 10%.<h3 id="8faf4b16-43d0-402b-b69d-16e53b9b6655">It's still a close race</h3>While the betting markets are pointing to a Trump victory in November, the polls still show the race is essentially a dead heat.And although some areas of the stock market have surged since Trump gained an advantage in the betting markets on October 4, <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-presidential-election-prediction-winner-donald-trump-kamala-harris-2024-8">the broader stock market is still suggesting a Harris win.</a>Since 1928, the S&amp;P 500 has had an 83% accuracy rate in predicting election outcomes.If the S&amp;P 500 posts a positive return in the three months leading up to election day, the incumbent party usually wins, and vice versa if the stock market posts a negative return.Since August 5, when the three-month countdown to election day began, the S&amp;P 500 is up 9%. As long as those gains hold until election day, the stock market predicts a Harris victory.

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