It is widely known that the unlocking of locked-up shares this coming Friday (Sept. 20) could produce sizable selling. However, there are four items that may limit the resulting price decline.
First, last Friday (Sept. 13) Donald Trump announced at a press conference that he will not be selling his shares. That removes a major uncertainty. That Friday afternoon news flash raised the stock about 10% by the end of the trading day. Perhaps there is more to come after shareholders and investors digest the news over this weekend. Here is the picture of the stock price over the final three hours, minute-by-minute.
Second, the latest short interest report (August 30) shows another increase, with 13 million shares now having been sold short. When the short sellers decide to take their profits, they will produce buying demand to offset some of the selling. Here is how the short interest has grown, even as the stock price has fallen.
Third, the November 5 election will determine who is to be president. If it is Trump, the “Trump brand” support for the Trump Media stock likely will be strengthened
Fourth, the mid-November 3rd quarter earnings report for Trump Media might offer some good news about the company’s results and outlook
Will the DJT doldrums end anytime soon?
There are three sides to that question.
First, with the stock price having fallen for many weeks, much of the effect of the unlocked share selling might have been anticipated
Second, once the newly unlocked sellers have sold, trading should settle down in a new price range
Third, the strength of the Trump brand support will determine how much the stock price can remain above the company’s fundamentals
All of that adds up to a wait-and-see answer – not a forecast, but an understanding of the uncertainties.
The bottom line – By the end of November, the picture should be much clearer
That picture could be positive or not, but at least the uncertainties should be diminished.