An investment management consultant has suggested that those who have shares in Donald Trump‘s social media platform should sell them.
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.
Photo by Curtis Means-Pool/Getty Images
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 contacted TMTG by email outside of business hours to comment on this story.
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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