Trump Media erases all 2024 stock gains, days before Donald Trump can cash in his $1.95 billion stake

Donald Trump is nearing the day he can sell his shares in Truth Social’s parent company, raising concerns about a potential sell-off that could hit meme stocks hard.

On paper, Trump’s stake in Trump Media and Technology Group (TMTG) is valued at $1.95 billion, which could help cover his mounting legal fines.

However, when he agreed to a reverse merger with Digital World Acquisition Company (DWAC) on March 25, he accepted a six-month lock-up period, preventing him from selling his 115 million shares.

Trump owns 59% of TMTG and any sales could cause the stock price to plummet unless done in small amounts.

With the lockup expiring in three weeks, investors are becoming increasingly anxious.

Trump’s financial situation appears strained: He’s selling Trump-themed sneakers, “God Bless the USA” Bibles and is now offering a piece of the suit he wore during his first debate with Joe Biden to collectors who buy $1,500 worth of digital Trump trading cards.

On Wednesday, shares of TMTG fell 6% to close just below $17, erasing all of the year’s gains, while the S&P 500 has risen 16% over the same period.

TMTG declined to comment and Trump was not available on Truth Social or X.

Loss-making TMTG still valued at 1,000 times sales

TMTG has now lost 80% of its value since hitting an all-time high of $79.38 on March 26, the first day of trading under the DJT ticker. That valued Trump’s personal stake at the time at nearly $9.11 billion.

The stock price could fall further. Last week, CEO Devin Nunes and CFO Philip Juhan sold $2.5 million worth of stock, further dampening investor sentiment.

Despite its $3.4 billion market cap, the loss-making social media company trades at more than 1,000 times annual revenue. Revenue for the first half of the year was just $1.6 million, with a deeply negative cash flow.

Wall Street analysts shun TMTG because of its “meme stock” status, which has made it uninteresting to professional investors. Even if analysts wanted to cover it, TMTG doesn’t publish key metrics, including the number of active, monetizable users.

The stocks were seen primarily as a bet on Trump’s re-election. But as polls tighten in key hard-fought states and Kamala Harris gains momentum, that bet is less certain.

November election results will determine TMTG’s share price

Trump now finds himself forced to return to Twitter (now X), where he has ten times as many followers and a much larger audience, to reach potential voters.

This further reduces Truth Social’s value to users if they access its content on other competitors’ platforms.

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Should he lose in November, Truth Social’s importance would diminish significantly going forward, as Trump’s political career would likely be over.

John Rekenthaler, vice president of research at financial services firm Morningstar, told Quartz that buying shares in TMTG is synonymous with buying Trump’s personal brand.

“But he will have no brand,” he said last week, “if he loses the presidential election for the second time in a row.”

There is even a scenario where Trump could sell his TMTG shares around September 20, about five days early, as long as the price does not fall below $12.

Either way, a sale would undoubtedly raise legal questions, as his son, Don Jr., as a director has access to material, nonpublic information, including third-quarter performance.

The only way this stock issue can end well for TMTG investors is if Trump finds a strategic investor in the company willing to take over his entire stake.

This story originally appeared on Fortune.com