The IT Nerd

Those who for whatever reason are holding shares in Trump Media And Technology Group, which is the company that owns Donald Trump’s Truth Social, have seen the share price go up to beyond $27 a share which is a stark difference from when the stock was basically in free fall as recently as early October. But those days might be over. It’s being reported that a key insider dumped his shares:

Trump Media director Eric Swider sold all of the stock he owned directly in the company on Friday, according to a filing with the Securities and Exchange Commission made Tuesday night. Previously, Swider had been the CEO of Digital World Acquisition Corp., the special purpose acquisition company that merged with Trump Media in March.

Swider did not respond to an inquiry. Via an LLC, he still owns another 18,000 shares in Trump Media.

Well, that’s not good if you’re looking to hold this stock for a long time. Because if one insider is dumping their shares, other insiders are likely to do the same thing. And the second that happens, this stock will be in free fall again. And that would really suck for anyone who still holds shares.

Watch this space.

At about this time last week, Donald Trump announced that he wasn’t going to sell any of his stock in Trump Media. That calmed fears that such a sale would tank the stock because he desperately needs cash from all reports, and caused the stock to soar. This was the value of the stock last Friday:

Fast forward to today and reality has set in for Trump and those who hold this stock. Here’s the value of that stock as I type this:

And if you want to see the downward trajectory of this stock over the last week, here you go:

That’s an almost 17% drop in value. And you have to think that this isn’t sustainable over the long term. At this point it’s only a matter of time before this stock crashes and burns. The only question is will it die slowly by losing value day after day, or will it be killed by Donald Trump cashing out his stake to get cash to deal with his various “problems”. But mark my words, this stock will crash.

We’ve been speculating what Donald Trump will do with his stake in Trump Media. Will he hold onto the stock or sell it to pay for his various “problems”.

Here’s the answer:

Trump Media & Technology Group, the social media business owned by former president Donald Trump, surged on Friday after Trump said he has “absolutely no intention of selling” his stake in the Truth Social owner.

And:

“A lot of people think the reason it’s down is a lot of people think I’m going to sell, and if I sell, it’s not going to be the same,” Trump said. “But I have absolutely no intention of selling.”

That caused the stock to do this:

That’s still over 70% below what it started trading at. But it’s the first positive news that the stock has had in a while. But it wasn’t all good news for Trump. He had a bit of a meltdown in the style of a two year old because of this:

Trump’s declaration prompted the stock to go parabolic. Not surprisingly, NASDAQ stopped trading on the security, which is standard practice when a stock’s price experiences huge swings in one direction or another. Trading was halted twice, each for five minutes. The security was one of dozens of listings on the exchange to be halted on Friday.

In response, the ex-president went on Truth Social to express his bewilderment and to threaten the operators of the exchange:

Seriously, this guy has lost the plot, lost his mind, is a couple fries short of a Happy Meal. Pick the metaphor that works for you or leave one in the comments. The point is that for a guy who claims he understands business, this is a massive over reaction to a pair of very brief trading halts that happen all the time. And he did this on a good news day for his stock. Though as I mentioned he’s still underwater from where the stock started trading at.

Mark my words, this will be short lived. Something will happen either with the election, or with his numerous criminal proceedings or civil proceedings that will trigger him to sell this stock to get money in a hurry. And this will cause the stock to crash. I’m calling now, this is not over.

I sat on this story for a while before posting it this morning because I wanted to see what the aftermath of Donald Trump’s disastrous debate with Kamala Harris in terms of the value of Trump Media stock after a full day of trading. Because one of the things that makes this stock a meme stock is the association of the stock with Donald Trump himself. Which in my mind isn’t a good thing because any drop in Trump’s perception means that the stock could potentially tank. And because of his disastrous debate on Tuesday night, this happened to the stock on Wednesday:

So the stock which was kind of in free fall as I’ve reported here and here took a 10% nosedive yesterday. That’s got to hurt as it takes the value of his stake in the company to below $2 billion. Not exactly chump change. But it’s a long way from the roughly $9 billion when the stock was at its all time high of over $70 a share. And you have to believe that it’s going to continue to go down further either by the fact that it hasn’t hit bottom yet, or the fact that Trump will likely cash out on the 20th of September which will make sure that the stock hits bottom in a hurry as he needs the cash to deal with his various “issues” shall we say.

Get your popcorn ready as the crash of this stock is coming. Perhaps sooner than anyone thinks.

When Trump Media, which is the company that owns floundering social media network Truth Social, Donald Trump received 115 million shares. But he couldn’t sell those shares in whole or in part for six months. That’s called a lock up period. And that lock up period expires in about three weeks. Roughly September 20th. Selling all of that stock in whole or in part could help with Trump’s mountain of legal bills, fines, and campaign costs. But there’s a problem with that if he decided to do that:

Trump owns 59% of TMTG, and any sale could tank the stock unless done in small batches.

News flash. The stock is already tanking as per this:

This is worse than the last time I checked in on this rapidly falling stock. And this is highlighted by this factoid:

TMTG has now lost 80% of its value since hitting its all-time high of $79.38 on March 26, the stock’s first day of trading under the DJT ticker. That valued Trump’s personal stake at nearly $9.11 billion at the time.

His stake is down to about $2 billion as I type this. That’s a horrible drop in value if you’re Trump. And it could get worse:

Without a fast-growing user base — and with the company likely struggling to post a profit for the foreseeable future — there’s plenty of reason Trump Media stock could continue to see new lows. There’s simply not much of a business to invest in today, and this is a stock whose free fall could be far from over.

So this is a business that can’t attract users (Truth social maybe has 5 million users), and isn’t making money. That’s not a good news story at all. And highlights the fact that Trump isn’t the great businessman that he thinks he is. So you should circle the 20th on your calendar. Because it is likely that this meme stock will crash and burn on that date.

From the “this might not help the share price” department comes news that Patrick Orlando who is the former CEO of Digital World Acquisition Company, which was a shell company that helped to take social media platform Truth Social public is being sued for securities fraud by the SEC:

In a filing with the court of District of Columbia, the SEC said Orlando broke rules concerning securities by issuing false and misleading statements while he led the blank-check firm.

Orlando misled investors by failing to disclose that his company had formulated a plan to acquire Trump Media & Technology Group Corp and was pursuing the acquisition before DWAC’s initial public offering, according to the filing.

In March, Digital World completed its merger with Trump Media & Technology Group that owns social media platform Truth Social, which is backed by Trump.

In July last year, DWAC had settled regulatory charges of “material misrepresentations” to investors.

The SEC had said DWAC was found to have violated antifraud provisions of federal securities laws. The company had agreed to a cease-and-desist order and to pay an $18 million penalty if it closes the merger.

Now news like this won’t help the stock price of a normal stock. But Trump Media is the definition of a meme stock as it is grossly overvalued. So the normal rules don’t apply. Having said that, this likely isn’t going to be good news for the stock and Trump Media. Thus it will be interesting to see what effect that this lawsuit has on both parties.

Trump Media who is the parent company of Truth Social has lost massive amounts of cash in Q1 of their fiscal year. How much cash? Variety has the answer:

Trump Media and Technology Group, the company affiliated with former U.S. president Donald Trump that operates Truth Social, reported $770,500 in revenue for the first quarter of 2024 and a net loss of $327.6 million. 

So in short, Trump Media has earned next to nothing in Q1, and lost an insane amount of money in Q1. For any other business, this would be pretty much fatal. But somehow, these guys are still operating. At least for now. The long and short of it that this is a meme stock. And there’s no scenario that I can see where this changes.

The Atlanta Journal Constitution is reporting that the Fulton County District Attorney’s office is seeking emergency safeguards after digitally recorded interviews of four election subversion defendants were leaked to the media, triggering conflict among attorneys in the Georgia indictment of former U.S. President Donald Trump and others.

In a court filing Tuesday, Fulton prosecutors asked Superior Court Judge Scott McAfee for an order protecting all discovery materials. They want to prohibit sensitive and confidential information from being shared beyond defendants and their attorneys. The order was granted late on Wednesday.

The leak underscores the need to protect digital content with new levels of privacy and security. Troy Batterberry, founder and CEO of EchoMark  who is a digital content privacy and security expert said this:

     “This is the latest very public example of how private information leaks continue to accelerate. These leaks put individuals and organizations at great risk and erode our society. The problem will only worsen until would-be leakers believe they might get caught. Today, they leak with impunity, given everyone’s digital copy of the private information is exactly the same. This allows them to leak and simply hide quietly within the anonymity of the group. That fundamentally must change to stop the leaks.”

I know that this will not be the last time that I will be writing about this topic in the context of a court case. Because we now live in a universe where leaks of this sort are a thing.

Last week I posted a story that the Donald Trump owned social network Truth Social may be about to die if it didn’t get the support of the majority of their shareholders to either close or extend a merger with a Miami-based company called Digital World Acquisition.

Well, they got that extension apparently:  

Shareholders voted to grant DWAC (DWAC) another year to pull off its merger with Trump Media & Technology Group, which owns Truth Social, according to an SEC document posted Wednesday. The groups now have until September 8, 2024 to combine.

The extension was approved by about 72% of stockholders, according to a regulatory filingWednesday.

Even though this is good news for Truth Social, it doesn’t solve the fact that this social network has been a train wreck next to a dumpster fire since it launched. And even Donald Trump who himself is a frequent poster on Truth Social has posted on Twitter as of late as part of his grifting attempts to say that his is innocent of all the various criminal charges that he is facing. Thus one has to wonder how much longer Truth Social has to live.