President Trump, who faces mounting legal bills from a bevy of court cases that he says are part of a plot to undermine his presidential comeback bid, has secured an additional 36 million shares of TMTG, increasing his stake to 114.75 million shares, according to a Securities and Exchange Commission filing made on April 30.
The move brings his stake in the company that operates Truth Social to 64.9 percent from 57.6 percent. It also means that he’s amassed an additional $1.8 billion on paper, bringing the value of his TMTG stake to a little more than $5.7 billion, according to the latest price of nearly $50 per share.
The stock has soared by more than 50 percent, to $49.93, in the past five sessions, although it’s still 25 percent short of its closing peak on March 27.
The $1.8 billion windfall is thanks to the fact that President Trump stood to gain 36 million in additional “earnout shares” if the TMTG stock performed well over a certain period, according to an April 15 filing.
‘Very Solid’
Following the merger and initial public offering at the end of March, market interest exploded in TMTG, which trades under the ticker symbol DJT. Its stock price soared above $79 per share on its first day of trading, sending the company’s market cap to more than $7 billion.Word of the loss sent its stock price to a low of $22.84 by April 16.
Since then, TMTG shares have rallied, with only one meaningful pullback between April 19 and 23, and are now trading at $49.90 per share, the highest since an April 3 close of $48.81.
Much of the $58 million loss that sent the stock price falling on April 1 appears to be related to an interest expense of $39.4 million on its outstanding debt, according to the 8-K filing. In 2022, the company made a net profit of $50.5 million.
The former president said on April 4 that media fixation on the $58 million loss was misguided. He touted TMTG fundamentals—which he said include more than $200 million cash and no debt—as “very solid.”
TMTG CEO Devin Nunes echoed that in an April 1 statement, saying those fundamentals open “numerous possibilities for expanding and enhancing” the platform.
“We intend to take full advantage of these opportunities to make Truth Social the quintessential free-speech platform for the American people,” he said.
TMTG’s meteoric rise and subsequent wobble sparked massive interest in shorting the stock.
‘Anomalous Trading’
In a recent letter to top House Republicans, Mr. Nunes urged lawmakers to open an investigation into “anomalous trading” and possible “unlawful manipulation” of TMTG stock.Mr. Nunes expressed concern about “naked” selling of TMTG stock, which is the practice of selling shares of a company without borrowing them first, according to the letter.
The tech CEO noted that the company has become the “single most expensive stock to short in U.S. markets” as of early April, arguing that traders now “have a significant financial incentive to lend non-existent shares” of the stock.
Pressing the issue further, TMTG issued a notice to DJT investors on April 23 highlighting steps they can take to prevent the lending of their shares by brokerage firms for the purpose of short selling.
“TMTG wants to clarify that brokerage firms may facilitate short selling in DJT shares by lending DJT shareholders’ shares held in margin accounts,” the notice reads.
“Through this practice, brokerage firms earn an alternative source of revenue by ‘lending’ shares to sophisticated and institutional investors who are betting that the stock’s price will fall. If the stock price in fact falls, then the brokerage firm and the sophisticated and institutional investors will profit while retail investors will not.”
To prevent their shares from being loaned out for the purpose of short selling, DJT investors were advised to hold their shares in cash accounts at their brokerage firms rather than in margin accounts.
They should also opt out of any securities lending programs, according to the notice.
