Trump Media Insiders Sell $16 Million in Stock Following Election

In the week after Donald Trump’s presidential election victory, top executives at Trump Media, the parent company of Truth Social, sold over $16 million worth of company stock. This significant sell-off, disclosed in new SEC filings, involved the Chief Financial Officer, Phillip Juhan, and two other corporate insiders. The timing of these sales, coupled with Trump Media’s already precarious financial position, has raised eyebrows and sparked questions about the company’s future and the confidence of its leadership.

Key Takeaways:

• Massive Stock Sell-Off: Trump Media insiders sold over $16 million in stock immediately following the presidential election.
• CFO’s Significant Sale: Phillip Juhan, CFO and Treasurer, sold the majority of the stock, executing a pre-planned trading strategy.
• Questionable Timing: The sales occurred directly after the election, raising concerns about insider knowledge and market confidence.
• Trump Media’s Financial Troubles: The company reported substantial losses ($19.2 million in Q3) despite a $6.3 billion market capitalization, highlighting a significant disconnect.
• Truth Social’s Limited Reach: Truth Social boasts a minuscule user base compared to established platforms like X (formerly Twitter), demonstrating a substantial challenge to its long-term viability.

Executive Stock Sales Detailed

The largest share of the stock sales came from Phillip Juhan, Trump Media’s CFO and Treasurer. Mr. Juhan, who had established a trading plan in August, sold 320,000 shares on Friday at $30.65 per share, totaling $9.8 million. He followed this up on Monday with the sale of an additional 64,000 shares at $32.97 per share, adding another $2.11 million to the total. Following these transactions, Juhan retains approximately 265,798 shares, with the vast majority being restricted stock units (RSUs) scheduled to vest gradually until March 2027.

Other Insider Sales

Eric Swider, a director at Trump Media, sold all of his personally held shares, totaling 136,183 shares at $28.23 per share, for a value of $3.84 million. While Swider’s sales were significant, it is noted that his company, Renatus Advisors, still holds a smaller stake in Trump Media. Scott Glabe, the company’s general counsel and secretary, sold 15,917 shares at $32.19 per share, for a total of $512,368. Glabe, like Juhan, still holds 336,576 RSUs subject to the same vesting schedule. Notably, on Election Day, Devin Nunes, Trump Media’s CEO, received 1.3 million RSUs, currently valued at nearly $38 million before vesting restrictions.

Trump Media’s Financial Reality

Trump Media’s financial performance presents a stark contrast to its market capitalization. While boasting a $6.3 billion market capitalization, the company reported revenue of only slightly over $1 million in the third quarter of 2024, and suffered losses of $19.2 million. This significant discrepancy raises questions regarding the valuation of the company and the sustainability of its current business model.

Truth Social’s User Base Lags

Adding another layer of concern is the performance of Truth Social. Data from Similarweb reveals that Truth Social had only about 200,000 daily active users on November 6th, 2024, the day after Election Day. This pales in comparison to other social media giants, with X reporting 36.7 million daily active users, Threads boasting 4.7 million, and Bluesky achieving around 1 million on the same day. This limited user base raises serious questions about Truth Social’s ability to generate meaningful revenue and attract a broader audience.

Questions and Implications

The timing of these significant stock sales, immediately following a highly anticipated election in which Donald Trump won, raises considerable questions. While the sales by Juhan were part of a pre-determined plan, the other sales, particularly the complete divestment of Swider’s holdings, raise concerns. Did these executives have access to non-public information that influenced their decision-making? Did they foresee a downturn in the company’s performance? The substantial discrepancy between Trump Media’s market valuation and its actual financial results further compounds these concerns.

The SEC’s Role

The Securities and Exchange Commission (SEC) will undoubtedly scrutinize these transactions to ensure compliance with insider trading regulations. Any evidence of unethical behavior or violation of securities laws could have severe consequences for those involved. A thorough investigation is warranted to assure public confidence in the fairness and integrity of the financial markets.

A Troubled Future?

The confluence of factors – the significant stock sales, Trump Media’s weak financial performance, and Truth Social’s small user base – paints a concerning picture for the company’s future. While the recent presidential election resulted in a victory for the company’s namesake, it remains to be seen if this political boost will translate into tangible financial success. The next few quarters will be crucial for Trump Media to demonstrate a sustainable business model and restore investor confidence.

“The sales, particularly the timing, raise serious questions and demand a thorough investigation,” said a leading financial analyst who requested anonymity. “This situation underscores the critical importance of transparency and accountability in the financial markets.”

Trump Media did not respond to CNBC’s request for comment at the time of publication. As the situation unfolds, it will be vital to monitor further developments and any official responses from the company and regulatory bodies.