Truth Social Tanks After Trump Moves 57% of Truth Social to a Trust (Controlled By Don Jr.)

Truth Social woke up this morning to a nasty head cold, and it has nothing to do with the weather. Donald Trump, the platform’s primary cheerleader and part-time meme lord (oh and President Elect), moved his entire 114.75 million-share stake (roughly 57% of Truth Social’s parent company) to a revocable trust. But let’s not kid ourselves… this isn’t some altruistic move. The trust? Yeah, Trump’s still the sole beneficiary. In simpler terms, he’s passing the ball to himself but letting his son, Donald Trump Jr., dribble it for a while.

The market reaction was not great, folks. Shares of Trump Media & Technology Group dropped 6% after the news hit, shaving about $200 million off the value of Trump’s stake. That brings it down from $4 billion to $3.8 billion. Imagine losing $200 million before your morning coffee… just another Friday in Trump’s world.

Here's why he’s doing this. Trump’s move technically distances him from direct ownership, but not really. The Donald J. Trump Revocable Trust is run by (you guessed it) Donald Trump Jr., who now has “sole voting and investment power.” Critics are already side-eyeing this setup, claiming it’s as effective at eliminating conflicts of interest as a screen door on a submarine.

Remember, this isn’t Trump’s first rodeo with trusts. Back in 2016, during his first presidential campaign, he made similar moves with his real estate assets to appease ethics watchdogs. Of course, it didn’t. Walter Shaub, former director of the Office of Government Ethics, famously called out the arrangement for doing little to resolve potential conflicts, pointing out Trump could still financially benefit from his holdings.

Timing is everything, and this move comes at a fascinating point. With Trump’s 2024 presidential campaign ramping up, he’s looking to dodge any accusations of conflicts of interest. However, the optics here might be doing more harm than good. Critics argue this maneuver gives his son free rein to sell shares without technically breaking Trump’s promise not to sell.

And let’s not forget the volatile history of Truth Social’s stock. The company, born out of a blank-check merger, saw its valuation balloon to $10 billion during Trump’s last presidential bid. Since then, it’s been a memestock rollercoaster, with investors treating it more like a political betting slip than a legitimate media stock.

(Source: New York Magazine)

The stock closed just above $33 after the 6% drop, but it’s still up for the year, thanks to the presidential campaign hype. Investors seem split… some see potential in Trump’s political clout driving the platform, while others are spooked by its non-existent fundamentals.

So, what does this all mean? For Trump, it’s a strategic move to keep his hands (sort of) clean while keeping the money within arm’s reach. For investors? Be prepared for them to start unloading shares whenever they feel like it.

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Stock.News does not have positions in companies mentioned.