Top Truth Social execs—including the CEO—are shedding stock before Trump even can

Donald Trump is in need of a massive payday to cover his legal expenses and presidential campaign, but he can’t tap into his Truth Social stock. At least not quite yet.

In late March, the former president’s social media company started trading on the Nasdaq soon after Trump Media & Technology Group merged with a blank-check company called Digital World Acquisition Corp. Truth Social launched in February 2022 after Trump was banned from Facebook and X as a consequence of the Jan. 6, 2021, insurrection at the Capitol. While he’s since been reinstated on both platforms, he’s stuck to his own, although his company isn’t performing as well as when it first launched.

Since its inception, Truth Social has seen its share price plummet for the most part. After soaring to $57.99 per share at launch, it’s worth just $19.60 per share, valuing the company at just over $3.8 billion. That means Trump’s payday—if he chooses to sell off his majority stake—will be much smaller than anticipated earlier this year.

“Truth Social is tanking because it is essentially a meme stock,” Robert R. Johnson, a finance professor at Creighton University and author of The Tools and Techniques of Investment Planning, Strategic Value Investing, and Investment Banking for Dummies, told Fortune. “The stock price of Truth Social is unconnected to the reality of the financials of the firm. In the first quarter of 2024, the firm lost $327 million on revenues of only $770,500. These aren’t numbers that remotely support the current stock price, much less the atmospheric values—nearly $80—that the stock hit in late March.”

How much Truth Social stock does Trump own, and when can he sell it?

Trump owns a $2.3 billion stake in Trump Media & Technology Group, which trades under the ticker DJT (also his initials), but he can’t liquidate any of it until Sept. 25, according to SEC filings. That’s because of a lockup period rule, which prevents insiders from immediately selling once a company goes public.

But Trump could sell off his shares five days earlier if Trump Media’s share price equals or exceeds $12 for any 20 trading days within a 30-day trading period starting Aug. 22. If the stock price stays steady, that means Trump’s restrictions could lift as soon as Sept. 20.

While Trump isn’t able to start selling his shares yet, some other insiders have started shedding their stake in the company. Trump Media’s chief financial officer and treasurer, Phillip Juhan, disclosed last week he’s selling $1.9 million worth of stock, according to SEC filings. Trump Media’s general counsel, Scott Glabe, chief operating officer Andrew Northwall, and chief technology officer Vladimir Novachki each sold shares as well, according to Aug. 22 SEC filings. Devin Nunes, a former Republican congressman and Trump Media’s president and CEO, also sold off $632,000 worth of stock last Thursday.

While it’s not necessarily uncommon for executives to sell some of their stake in a company, selling at a loss—which they did—can be an indicator of trouble ahead.

“Since selling a stock at a loss is painful, an investor who sells at a loss must have particularly negative information,” Peter Kelly, a finance professor at the University of Notre Dame, wrote in a 2018 paper published by Oxford Academic. “And what you see is when stocks are sold at a loss, it predicts negative returns.”

Would Trump really sell his DJT shares?

While Trump is still sitting on a nice chunk of change, it’s somewhat unlikely that he’d sell his entire stake in the company for some cash flow. That’s largely because it could end up tanking the stock even further.

“Speculators in Truth Social would likely see a sizable loss in wealth as Trump sells off some of his position in the firm,” Johnson said.

And that wouldn’t be in Trump’s interest, since many shareholders are also his political supporters who could get burned by a massive selloff.

“If Trump were to sell a large number of shares and the stock price tanks, to some degree he would be burning his own supporters who bought the stock,” Jay Ritter, a finance professor at the University of Florida’s Warrington College of Business, told CNN. “Politically, that may not play out real well for him.”

While all eyes will be on Trump come late September in terms of whether he’ll choose to sell any stock, the time to really watch Trump Media stock will be around the time of the election.

“The case for speculating—note, I say speculating and not investing—in Truth Social is that Trump wins the presidency and the social media platform gains popularity and is able to create a sustainable business model,” Johnson said. “The stock is under pressure as those prospects have dimmed with the recent surge in popularity of the Democratic ticket.” As of Friday, Democratic presidential nominee Kamala Harris held a slim margin over Trump, according to a Wall Street Journal poll.

This story was originally featured on Fortune.com