Investors are dumping Trump Media (DJT) today after its latest filing with the Securities and Exchange Commission enabled President Donald Trump to trim his stake in the company, held in a trust that his son Donald Trump Jr. manages, by more than $2 billion. The filing also covers potential sales by other insiders.
Trump’s selloff could prove disastrous for DJT as he’s currently the largest individual shareholder of TMTG. Including today’s decline, Trump Media stock is down 55% versus its year-to-date high.
President Trump May Not Sell DJT Shares
Trump now has the right to unload nearly 115 million shares of the media company.
However, the filing does not guarantee or even indicate that he plans on exercise that right any time soon. In fact, the Republican leader has previously signalled intent to keep his stake, saying “I don’t want to sell my shares – I don’t need money.”
In a statement on Wednesday, the Nasdaq-listed firm asserted as well that its filing does not hint at the president’s plans of selling DJT shares, adding “there currently is no open window for any affiliate to sell shares.”
Still, there’s reason for investors to consider cutting their exposure to Trump Media stock.
Why Investors Should Sell Trump Media Stock
Trump Media is a high-risk investment as it generated just $3.62 million in revenue in 2024 while its net loss has soared to a staggering $401 million over the same period.
Still, the Florida based company currently has a price-to-sales multiple of an astronomical 1,188x, which underscores the massive disconnect between its financials and its valuation.
Investors should practice caution in spending money on DJT shares as the firm’s core offerings, Truth Social and the recently launched streaming service, Truth+, have failed to attract meaningful demand.
Plus, no Wall Street analysts currently cover Trump Media stock, as tracked by Barchart.com, which indicates a lack of interest from the financial community that typically leads to lower liquidity and higher volatility.
All in all, poor financial health and an unreasonable valuation makes TMTG a high-risk investment, especially now that fears of a recession have been brewing again.
