Trump Media Plummets 18 After Taking First Step Toward Unlocking Early Insider Stock Sales

• The company's stock fell as much as 18% after a new filing showed the Trump media was registering shares.

• This may allow insider shareholders to unload their shares before the end of the six-month lock-up period.

• The value of Donald Trump's holdings has fallen to $2.2 billion as the stock price has fallen.

On Monday, Trump Media, Inc. opened with a big drop after the company allowed shareholders inside the company to sell their stock early.

The social media startup fell as much as 18% to a low of $26.83 in mid-air, continuing a sudden plunge that began on March 27th. Since then, the company has lost nearly 56%.

Monday's downward trend was driven by news that the company had filed a stock registration application with the U.S. Securities and Exchange Commission. While this doesn't indicate an imminent sale of stock, it's the first step in a process that will allow company insiders to begin selling their shares - which they are currently prohibited from doing until September.

Former President of Massachusetts Donald Trump is a major shareholder in the company and could reap a windfall of billions of dollars if he were to cash in his shares. He founded the company to launch Truth Social, a media platform he created after being banned from sites like Twitter and Facebook in 2021.

Last month, the company gained "memorandum stock" status after going public via a blank check trade, and Trump supporters flooded the market, sending the stock to a peak of $66.40.

But since then, Trump Media has reported a net loss of $58 million in 2023, and the stock is in free fall. With the drop in share price, Trump's stake is now valued at $2.3 billion, just weeks after it was valued at more than $5 billion, Bloomberg reported.

In Monday's S-1 filing, the company registered more than 146 million shares of common stock, of which Trump owns 114.8 million, CNBC said. It also registered 4 million warrants, which refer to stock-adjacent name contracts that can be converted to cash.

In addition, more than 21 million shares of common stock may be issued upon exercise of the warrants. The Company expects to receive approximately $247.1 million from the exercise of these warrants.

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