Trump Media Stock Drops as Lockup Ends

Investors Dump Shares After Early Supporters Allowed to Sell

TMTG, the parent company of former President Donald Trump's Truth Social platform, saw its stock price plummet by over 10% on Monday, August 22, as a lockup period ended, allowing early investors to sell their shares. The lockup period, which is a common practice in initial public offerings (IPOs), restricts investors from selling their shares for a certain period after the IPO.

Early Supporters Cash Out

The lockup period for TMTG's IPO expired on August 22, allowing early investors, including hedge funds and venture capitalists, to sell their shares for the first time. Many of these investors had purchased shares at a discounted price during the IPO, and they were eager to cash out their gains.

Concerns About Truth Social's Future

The stock price drop also reflects concerns about the future of Truth Social. The platform has struggled to gain traction, and it faces competition from established social media giants such as Twitter and Facebook. Additionally, Truth Social has been criticized for its lack of moderation, which has led to concerns about misinformation and hate speech on the platform.

Trump's Influence Wanes

The stock price drop also suggests that investors are becoming less optimistic about Trump's influence in the media landscape. Trump's social media accounts were banned from major platforms after the January 6, 2021, attack on the U.S. Capitol, and his Truth Social platform has not been able to replicate the reach and engagement of his previous accounts.

What's Next for TMTG?

It remains to be seen how TMTG will respond to the stock price drop and the concerns about Truth Social's future. The company may need to take steps to improve the platform's moderation and attract more users if it wants to regain investor confidence.

Conclusion

The lockup period expiration and the subsequent stock price drop for TMTG are a reminder of the challenges facing Trump's media ventures. The company will need to overcome concerns about Truth Social's future and prove that it can be a viable competitor in the crowded social media landscape.