| From: kidl | 9/1/2024 1:28:15 PM | | | | | | Trump Media Stock (DJT) - Disgruntled 18M Shares Join The 'Great Unlocking'
Last Thursday (August 30), a news report described this Sarasota, Florida, court's denial of Trump Media's request.
"A Florida judge has denied a motion by Donald Trump’s Truth Social to block the sale of 18 million shares by two of the company’s co-founders, determining that the company would not suffer irreparable harm and that any potential damage could be addressed through financial compensation. The ruling came from Sarasota County Circuit Judge Hunter Carroll on Friday, who dismissed Truth Social’s arguments for a temporary injunction.
"Truth Social, officially known as Trump Media & Technology Group Corp. (TMTG), sought to prevent Arc Global Investments II LLC and United Atlantic Ventures LLC from selling their shares when a lock-up restriction expires on September 19."
"Kevin Jacobs, representing Arc Global, argued that the temporary injunction was akin to an impermissible asset freeze under Florida law. The defense also highlighted that TMTG recently issued 37 million shares to another entity for unrestricted market sale, undermining claims that the company would be significantly harmed by the sale of 18 million shares."
This news is serious. Attempting to prevent others from selling reveals Trump Media's concern that the unlocking in three weeks could unleash a selling frenzy. Because Donald Trump is the controlling owner, he and the board view Trump Media as Trump's company. So, will Trump now ask the board for an exemption to sell some of his locked-up shares before the September unlocking date? He is allowed to do so.
Importantly, short sellers will gain confidence from this news. Those disgruntled shareholders holding low cost or free stock may not take their time liquidating their deteriorating stockholdings.
Current shareholders: Be sure you want to hold. The new danger now is that the price will start sinking toward a fundamental-based level. Because that fundamental level is in the low single digits, the risk of hanging on looks significant.
Why the single digits? Because the fundamentals are so low:
- Price per share: $19.50
- Book value per share: $1.78
- Cash per share: $1.77
- Revenues per share: $0.03
- Earnings per share: $(0.43)
- Quarterly revenue growth for 2nd quarter 2024 vs 2023: (30)%
To improve those fundamentals is a hefty challenge. Not only does Trump Media need to shift revenue growth to positive, but it also must do so very significantly. In addition, it needs to control expense growth to become profitable. Accomplishing those heavy tasks, if possible, will take time, and there are no current fundamental improvements to show new investors as proof of such a capability.
Therefore, something must happen to attract new investors when the unlocked selling is in full force, and that means the stock must become cheap enough to appeal to speculators. Without fundamental support, technical indicators must provide interest. The current, multi-week decline might provide short-term opportunities, but probably not until all the shares are unlocked and the unknown selling effect becomes visible.
The graph below provides the picture of the stock's recent moves and the notable barriers that lie beneath. The question is, over the next three weeks, will those barriers provide support or will selling outweigh buying and push the price further down. (As I have described before, I believe the $17.50 barrier is an important emotional barrier because reaching that price means all the 2024 excitement and expectations are completely washed out.)
Steady decline headed for Sept. 20 unlocking with multiple barriers below
John Tobey: The bottom line - Short-term speculation in the face of unknown adversity is high riskWhen the September 20 floodgates open, Trump Media stock selling will ramp up. How much and how price sensitive is unknown. Also, how short sellers, speculators, and shareholders (who can sell now) will behave over the next three weeks is unknown. Therefore, with high risk having unknowable results, this looks like a good time to sit on the sidelines with cash.
Trump Media Stock (DJT) - Disgruntled 18M Shares Join The 'Great Unlocking' (forbes.com) |
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| From: Jhana | 9/3/2024 5:52:08 PM | | | | | | The only issue for remaining DJT longs is where their max pain point resides, then they dump into the flood and head home to lick their wounds.
At 645x trailing sales, it's still pretty rich. We'll see if powers unknown want to spend the bucks to let Trump get out with a billion or more still. |
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| From: Dan3 | 9/15/2024 10:12:51 PM | | | | | | Trump says, "I won't sell my shares."
The stock goes up by $4.75
- then people start thinking, "has this guy ever tried to swindle anyone?"
40 minutes after the pump and the stock dumps by $2.75
It'll be interesting to see what happens next. |
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| To: kidl who wrote (44) | 9/18/2024 11:15:19 PM | | From: ralfph | | | | If you were an insider and treated like this what would you do with your shares when the stock becomes free trading?
certainly selling would be high on the list
not unusual for an insider to start feeding the ask
and maybe just sell your last million shares at market - just to make a point. |
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| From: Jhana | 9/19/2024 6:07:05 AM | | | | | | Good summary from the scrolling headlines above:
As Its Stock Nosedives, Truth Social Sounds Like an Absolute Wreck Behind the Scenes
Will Trump go down with the ship?
Smoke and Mirrors
We're just days away from when former president Donald Trump is legally allowed to start selling off his vast holdings of Truth Social meme stock.
The six-month lockup period, implemented by regulators to stop insider trading, could expire as soon as tomorrow, Fortune reports, giving Trump the green light to offload his 114.5 million shares of Truth Social owner Trump Media & Technology Group (TMTG).
That's an astonishing 57 percent of all of its existing stock — and according to Forbes, a huge chunk of Trump's net worth.
And while the former reality TV host vowed that he's "not selling" last week, investors are clearly wary that he's lying once again. Shares of TMTG have dropped precipitously lately, erasing all his company's stock gains since merging with a blank check company in March.
Within just the last five days, the stock has fallen well over four percent, sliding to just north of $15 per share — well below what the company was worth even pre-merger.
And, as Fortune found, TMTG is in an abysmal state, despite its absurd multibillion-dollar valuation. Revenues are declining, profits are a distant pipe dream, and multiple lawsuits are eating into its cash holdings.
With the presidential election rapidly approaching, investors are likely asking some serious questions: is any of this sustainable? After all, the company doesn't have any viable business behind it. It's a meme stock inextricably and symbolically linked to Trump's image — and he's gotta be tempted to cash out.
Meme WreckIf Trump does sell his holdings, he'd risk triggering a fire sale, tanking the company's already abysmally low share value and, meaning he'd lose out on any future sell-offs.
Trump is caught between a rock and a hard place, as Fortune points out: by not selling, he'd continue to tie his own reputation to a company that has raised billions, while only making a tiny fraction of that in revenues.
And the numbers paint a dire picture of the company's financials. In its latest quarterly earnings report, TMTG revealed that it had lost a whopping $344 million in the first half of 2024 alone. Costs grew precipitously from $9.8 million to $118.5 million over the same period.
In short, should TMTG be added to the pile of bankruptcies that Trump has left in his wake over several decades? The former president's precarious meme stock is on incredibly thin ice — and investors have seemingly seen enough of the clown show.
"The only bull case for the stock that I can think of is the greater fool theory of investing," University of Florida business professor Jay Ritter told Fortune. "You can make money by buying an overvalued stock if you can find an even greater fool who is willing to buy it from you at an even more-inflated price." |
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