Trump Media faces $4 billion drop as shareholders brace for lockup deal to expire

Donald TrumpTrump’s media startup Media & Technology Group Corp. suffered a substantial depreciation in its value, the loss of almost 4 billion dollars.

What happened: As the lock-up agreement nears expiration, the company’s major shareholders are preparing for a possible sale. The company, which operates the social media platform Social Truthhas witnessed a loss of approximately $6 billion in value over the past four months.

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The stock fell to its lowest level since its initial public offering through a special purpose acquisition company (SPAC) merger in March.

According to the Bloomberg report, Trump, who owns about 60 percent of the company, saw his stake drop to about $2.1 billion. Other significant shareholders incl Andy Litinsky and Wes Mossthe company’s co-founders and Patrick Orlando, whose fund facilitated the SPAC merger, also suffered significant losses.

Trends: During market downturns, investors learn that unlike stocks, these high-yielding real estate notes, which pay 7.5% – 9%, are hedged against resilient assets, protecting against losses.

With the end of the lockup agreement on the horizon, investors are expecting a wave of selling from these insiders. However, Trump has said he has no intention of selling his shares. Despite this, the stock rose 12% following his statement.

Shares of Trump Media underperformed, falling to $17.97 from $40.58 on July 15. Despite reporting second-quarter revenue of less than $1 million, the company’s valuation remains high.

As the lock-in period ends, investors are bracing for potential selling pressure. However, major shareholders may face difficulties in discreetly offloading their holdings.

Trends: Amid the ongoing electric vehicle revolution, overlooked low-income communities now harbor a huge investment opportunity at just $500.

Why it matters: The impending expiration of the lockup has created a sense of uncertainty among shareholders. The significant decline in the company’s value raised concerns about the company’s future performance. The situation is further complicated by Trump’s claim not to sell his shares, which led to a temporary increase in the share price.

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However, the long-term impact of this decision remains to be seen. The company’s high valuation despite its disappointing earnings is another point of concern for investors.

As the lock-in period ends, the market will witness significant activity, the outcome of which will play a crucial role in shaping the company’s future.

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This article Trump Media faces $4 billion shortfall as shareholders brace for lock-up deal expiration originally appeared on Benzinga.com