Donald Trump's Truth Social shares drop to lowest since January

Donald Trump's social media company is eyeing plans to issue millions more shares, just as the former president's hush-money criminal trial begins in New York.

The move from Trump Media also marked a step toward letting insiders, including Mr Trump, sell their holdings.The company has already been hit by a wave of selling since official trading started after its formal stock exchange debut in March.

Shares fell another 14% on Monday.

As Mr Trump sat quiet and motionless in the courtroom shares in the company which runs the social media platform Truth Social slid to less than $28 apiece.

It debuted on the Nasdaq stock exchange last month, via a merger with Digital World Acquisition Corp, a shell company that was created in 2021 to find a firm to buy and make public.

The deal, which briefly sent the share price surging above $70, injected about $200m into the company and has generated billions of dollars in paper wealth for Mr Trump, who is the majority shareholder.

Mr Trump, who is currently running for re-election while facing numerous legal battles, is currently barred from selling his shares until about September.

In a regulatory filing, Trump Media said a potential 146.1 million shares could be sold, including 114.8 million shares owned by Mr Trump.

It also notified investors of plans to issue roughly 21.5 million additional shares in connection with warrants, which give the owner the right to shares at a certain price. Trump Media said it expected to raise about $247m via such sales, which are common after a public listing like Trump Media's.

The update, which had been expected, had been in the pipeline for some time.

"There are no new issuances of shares being disclosed for the first time in the preliminary S-1 filed today. All categories of issuances were previously disclosed in public filings prior to the shareholder vote for our merger," the company said in a statement.

Still, shares in the firm fell to their lowest levels since January after the announcement.

Analysts say Trump Media shares remain over-valued compared with the size of Truth Social, which attracted an estimated 7.7 million visits last month. Its auditor has warned it is at risk of failure, after it reported less than $5m (£4m) in sales and more than $50m (£40.1m) in losses in 2023.

Analysts have said appetite for Trump Media stock has been boosted by small-time investors, rather than big Wall Street firms.

Their bets on the company caused a big spike in the price of Digital World shares when the plan to buy Trump Media was first announced in 2021 and again in January, as Mr Trump emerged as the leading Republican presidential candidate.

In recent weeks, Mr Trump has sought to raise confidence in the company, noting that Truth Social was "the primary way I get the word out and, for better or worse, people want to hear what I have to say".

"If people who believe in putting America First and want to Make America Great Again, support TRUTH, we will be your Voice like never before," he urged his followers on the platform over the weekend.

"Think of this as a Movement, the Greatest Movement in the History of our Country," he said.