Trump-related Media Shares Suffered a Dip This Week
Last week, Trump Media (DJT with a 5.22% share) saw significant sell-offs, leading to a substantial decline in its stock price. The company's shares closed the week at a 11.9% lower price compared to the previous week's market close, as reported by S&P Global Market Intelligence.
This past week, Trump Media witnessed mass sell-offs as investors decided to cash out on the stock's gains following the elections. Moreover, three company insiders also decided to sell their shares, which further encouraged other investors to follow suit.
Insider Selling Leads to Downturn in Trump Media Stock
Filings with the SEC suggest that top-level members of Trump Media sold off their company shares following Donald Trump's victory in the 2024 presidential election. Over a period of three days, CFO Phillip Juhan sold an impressive 384,000 shares, while Director Eric Swider sold around 136,000 shares, and General Counsel Scott Glabe sold approximately 16,000 shares. The collective total of these sales amounts to roughly $16 million.
Are Further Sell-offs by Trump Imminent?
Donald Trump continues to hold the majority of the company's shares. Investors have been closely monitoring any moves made by the incoming president regarding the stock. Surprisingly, Trump has not sold any shares, and from what has been indicated so far, he does not plan to do so in the near future.
In a post on the Truth Social platform, the centerpiece of the company’s business, Trump denounced claims that he was selling his stake and made it clear that he has no intention of selling his shares.
If Trump were to decide to sell his shares, it would likely lead to a steep drop in the company's stock price. However, even if Trump maintains his stake, the share price may still face bearish pressure.
After the election, the prospects of a major bullish catalyst for Trump Media stock remain uncertain. With a current valuation of around $6.1 billion, the company is trading at extremely high valuation multiples. In the first three quarters of the year, the company's revenue only amounted to $2.61 million. Although the business is still in its early growth phase, the stock seems hugely overpriced when compared to the company's recent performance.
Investors might be wary of further investments in Trump Media due to the significant sell-offs by company insiders. The sale of shares by top-level members like CFO Phillip Juhan, Director Eric Swider, and General Counsel Scott Glabe has raised concerns about the future financial health of the company.
Given the substantial amount of money involved in these insider sales, potential investors may view it as a sign of financial uncertainty and hesitate to invest or even consider selling their existing shares.
