People who have shares in Donald Trump's social media platform should sell them, an investment management consultant has suggested.
Writing for Forbes, John S. Tobey, who has worked in the investment industry for more than 30 years, said that while the value of the stock may increase, investors may risk losing out if the shares devalue further.
Trump holds almost 60 percent of Trump Media & Technology Group (TMTG), which runs the Truth Social platform as its primary asset.
But since shareholders of Digital World Acquisition Corp., an existing shell company, agreed to merge with TMTG earlier this year—clearing the way for the former president's company to go public—its stock value has declined.
When the merged group debuted on the stock market on March 26, under the ticker DJT, shares initially surged above $78, closing its first day of trading at $57.99 and giving the company a valuation of $11 billion. The value of each share in the merged group reached $71.90 on March 27, before its profit and loss figures were released.
On April 17, Google Finance data showed the value of each share at $22.84. This was the lowest the share price had been since January 16, exactly three months earlier, when it was $22.35, meaning the share price was a little more than before it merged with Trump's Truth Social.
The value then increased somewhat and according to April 29 Google Finance data, it is now worth $41.54 a share.
On April 15, Trump filed documents with the Securities and Exchange Commission (SEC) meaning that, pending the SEC's approval, some investors will be able to sell their shares.
"On April 15, Trump Media filed the SEC Form S-1 in order to register all of the newly merged company's shares for sale. That started the clock ticking for the SEC approval followed by a potentially large sell-off," Tobey explained.
Tobey said people should "not wait" to sell their shares.
"Investing successfully means running for cover when the floodgates open," he wrote. "Waiting to see if floodwaters really are coming means getting swept downstream.
"Wall Street is filled with successful investors who 'sold too soon.' After all, you can always buy back if the waters recede. Or, more likely, you just go another direction where the sun is shining on dry land."
A spokesperson from the company previously told Newsweek: "Truth Social created a free-speech beachhead against Big Tech for a fraction of the startup and operating costs that the legacy tech corporations incurred. We have no debt, more than $200 million in the bank, and the support of hundreds of thousands of retail investors, who fervently believe in our mission."
Newsweek sent TMTG a Raw Story blog about the Forbes post for reference and asked the company to comment on this story.
A spokesperson said: "Newsweek re-reporting a Raw Story blog post is all the proof anyone needs to see how previously respectable media outlets have collapsed into lazy, politicized imbecility."
When Newsweek sent the company the Forbes blog directly, the spokesperson said: "Newsweek sending us a link to a Raw Story blog post, then changing their source to Forbes after we ridiculed their decision to re-report the Raw Story blog, is all the proof anyone needs to see how previously respectable media outlets have collapsed into lazy, politicized imbecility."
Update 04/29/24, 10:49 a.m. ET: This story was updated with comment from TMTG.
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Kate Plummer is a Newsweek reporter based in London, U.K. Her focus is on U.S. politics and national affairs, and ... Read more
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