A major investor has drastically reduced its stake in Trump Media & Technology Group, the company behind Truth Social, potentially signaling trouble for the social media platform.
At a Glance
- United Atlantic Ventures (UAV) reduced its stake in Trump Media from over 7.5 million shares to just 100 shares
- UAV’s stake value dropped from over $100 million to around $1,400
- Trump Media shares hit their lowest level on record last week
- Donald Trump owns about 57% of Trump Media, worth approximately $1.6 billion
- The reduction follows the end of insider trading restrictions related to the company’s March stock market debut
Major Investor Slashes Stake in Trump Media
United Atlantic Ventures (UAV), managed by Trump Media co-founder Andrew Litinsky, has drastically reduced its stake in Trump Media & Technology Group (TMTG), the company overseeing Truth Social. According to recent regulatory filings, UAV cut its holdings from over 7.5 million shares to just 100 shares. This significant reduction has seen the value of UAV’s stake plummet from more than $100 million in late March to approximately $1,400.
The move comes as TMTG shares have been declining, hitting their lowest level on record last week. This reduction in stake followed the end of insider trading restrictions related to the company’s March stock market debut. The timing and scale of the divestment have raised questions about the company’s performance and future prospects.
Trump’s Stake and Company Performance
Despite the investor pullback, former President Donald Trump maintains a significant stake in the company. Trump owns approximately 114.75 million shares in TMTG, worth about $1.6 billion based on the latest closing price. This represents about 57% of the company’s ownership.
Trump Media’s value had initially ballooned to nearly $10 billion after its Wall Street debut but has since declined considerably. The company’s stock has been volatile, with share declines accelerating after President Joe Biden ended his reelection bid on July 21. As of the latest reports, the company’s stock market value stands at approximately $2.8 billion.
Legal Disputes and Company Background
The reduction in UAV’s stake comes amidst ongoing legal disputes between Trump and the company’s cofounders. Trump filed a lawsuit against Litinsky and his partner Wes Moss in April, alleging reckless decisions and significant damage to TMTG. The lawsuit demanded that Litinsky and Moss return their stake in the company. Conversely, Litinsky and Moss had previously filed a lawsuit against Trump, claiming he planned to dilute their stake in the company.
Both Litinsky and Moss have connections to Trump’s past business ventures, having been contestants on NBC’s The Apprentice. Litinsky later worked for the Trump Organization and played a key role in arranging the merger that took TMTG public and co-creating Truth Social.
Financial Challenges and Future Outlook
Trump Media has been facing financial challenges, with reports indicating that the company has been burning through cash. Its revenue has been compared to that of just two Starbucks coffee shops, raising concerns about its sustainability and growth prospects. Despite these challenges, Trump stated on September 13 that he did not plan to sell his shares.
The recent stock performance and investor actions have put Truth Social’s future in question. As the social media landscape continues to evolve, the platform will need to address its financial stability and user growth to remain competitive. The coming months will be crucial in determining whether Truth Social can overcome these hurdles and establish itself as a viable alternative in the social media market.
