FILE PHOTO: The Nasdaq Market site is seen on the day that shares of Truth Social and Trump Media & Technology Group start trading under the ticker "DJT", in New York City, U.S., March 26, 2024. REUTERS/Shannon Stapleton/File Photo
(Reuters) -Shares of former U.S. President Donald Trump's media company tumbled almost 8% to a new low on Friday, extending recent losses after a lock-up on insider sales expired.
Five straight days of declines in Trump Media & Technology Group, which is 57% owned by the Republican presidential candidate, have left its market capitalization at $2.7 billion.
Shares of the cash-burning company, which operates the Truth Social app, ended at $13.55, the lowest close since its stock-market debut in March.
Restrictions on insider selling expired on Thursday after markets closed.
Traders exchanged about $300 million worth of Trump Media shares during the session, the highest turnover for the stock in a week, according to LSEG data.
Trump, whose stake is now worth roughly $1.5 billion, said last week he does not plan on selling his shares, turning the focus to other major stakeholders who could sell their shares.
United Atlantic Ventures and Patrick Orlando, whose fund ARC Global Investments II sponsored the blank-check company that merged with Trump Media in March, together own about 11% of Trump Media shares, according to a company filing.
With only a third of Trump Media's shares currently available for trading, any major share sale could send the company's stock price lower.
"Not only will the possible new selling activity affect DJT's stock price directly, it will also increase DJT's stock lending pool which will facilitate increased short selling in the stock," said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, in a note on Thursday.
Trump Media and Orlando did not immediately respond to a request for a comment.
Trump Media saw its value balloon to nearly $10 billion following its Wall Street debut, lifted by Trump supporters and retail traders who saw it as a speculative bet on his chances of securing a second four-year term as president.
Since then, Trump Media shares have lost most of their value, with declines accelerating after President Joe Biden gave up his failing reelection bid on July 21.
(Reporting by Medha Singh in Bengaluru and Noel Randewich in San Francisco; Editing by Saumyadeb Chakrabarty and Rod Nickel)
