Shares in Trump Media & Technology Group (TMTG) plunged 7.4% on Wednesday, adding to a steep decline that has erased much of the early frenzy surrounding the company.
The latest drop followed a filing with the Securities and Exchange Commission (SEC) late Tuesday, revealing that President Donald Trump is preparing to sell his entire $2.3 billion stake in the company.
The filing showed that TMTG plans to sell more than 142 million shares, including Trump’s personal stake of 114 million shares, which is currently held in a trust controlled by his son, Donald Trump Jr. While the company insisted in a statement that this was a “routine filing” and that Trump was not yet selling, the prospect of the president cashing out rattled investors, deepening the company’s ongoing stock slide.
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TMTG’s Downward Spiral: From Frenzy to Freefall
TMTG, which operates Truth Social, has been in a steady decline for months, shedding more than 40% of its value in 2024. The company, once seen as a key pillar of Trump’s post-presidency business empire, has struggled to maintain momentum after an initial surge of enthusiasm among retail investors.
When Trump first launched Truth Social in 2022, it was presented as an alternative to major social media platforms that had banned him following the January 6, 2021, attack on the U.S. Capitol. The company quickly attracted investors eager to support Trump’s vision of a free-speech platform. However, enthusiasm has since waned, as the company continues to post financial losses and struggles to attract a mainstream audience.
TMTG reported a net loss of $19.2 million in the third quarter of 2023, and despite having roughly 650,000 shareholders, it has failed to gain institutional support. The vast majority of its shareholders are small retail investors, with only about 2,100 investors holding more than 5,000 shares.
Trump’s Return to X Raises Questions About Truth Social’s Future
A major factor that accelerated TMTG’s decline was Trump’s return to X (formerly Twitter), the platform where he once had over 80 million followers. After owner Elon Musk lifted Trump’s ban in late 2022, speculation swirled that the president would abandon Truth Social in favor of the far larger platform.
For months, Trump remained exclusive to Truth Social, but as his 2024 reelection campaign intensified, the need to reach a wider audience became apparent. In August 2023, Trump made his highly anticipated return to X, posting for the first time since being reinstated. The move was widely interpreted as a sign that he was distancing himself from Truth Social.
Trump’s Exit from TMTG?
Trump’s potential stock sale is the latest indication that he may be pulling away from the company he founded. While he has not officially announced any plans to abandon Truth Social, his re-engagement with X suggests that he no longer sees it as his primary online megaphone.
In September, Trump reassured investors that he had no plans to sell his shares, causing TMTG’s stock to surge temporarily. However, trading was halted twice by Nasdaq that day due to extreme volatility. At the time, Trump lashed out at the exchange, accusing it of “taking orders from” the SEC and interfering with his business.
Now, with the prospect of him offloading his entire stake, investors fear that TMTG could face an uncertain future. The company has yet to demonstrate it can be viable without Trump’s direct involvement, and if he cashes out, it could signal a loss of confidence in the platform’s long-term prospects.
Market Uncertainty Grows Amid Trump’s Tariff Announcement
The stock drop also comes at a precarious time for financial markets, as investors brace for Trump’s new “reciprocal” tariffs, which he is set to unveil in a White House Rose Garden ceremony later Wednesday. The tariffs, which he has dubbed “liberation day” trade measures, are expected to target foreign imports with aggressive new levies, further roiling market sentiment.
Amid this backdrop of uncertainty, TMTG’s troubles appear far from over. The company’s fate remains closely tied to Trump’s political and business decisions, and as he inches closer to a possible exit, the stock’s downward spiral may only accelerate.