Trump Media (NASDAQ: DJT), the parent company of Truth Social, is quite a unique case. Before the election, DJT shares moved to the upside were a reflection of positive momentum in Trump’s campaign. Ever since the inauguration, volatility has subsided — but the sentiment is far from positive.
At press time, Trump Media stock was changing hands at a price of $24.10. Despite a short-term surge preceding the presidential inauguration, DJT shares have been on a downward trajectory since the start of the year, having lost 29.33% of their value.
It is impossible to separate Trump Media’s price action from the public sentiment that surrounds the president. The administration’s approach to tariffs has brought a lot of uncertainty, particularly when it comes to riskier assets such as stocks and cryptocurrencies — while Donald Trump’s seeming disregard for financial markets only served to add fuel to the fire.
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Now, Finbold’s insider trading radar has picked up SEC Form 4 filings detailing liquidations made by two key company personnel. What’s more, there’s an interesting detail which suggests that these trades constitute a more reliable bearish signal than your average insider sale.
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This signal is triggered upon the reporting of the trade to the Securities and Exchange Commission (SEC).
CFO and director dump $728k worth of Trump Media stock
On March 10, Phillip Juhan, the Chief Financial Officer (CFO) of Trump Media executed three transactions — all of which were sales. The CFO sold a total of 21,059 DJT shares for roughly $431,621.
A day later, Eric Swider, a member of the company’s board of directors, sold 15,000 Trump Media shares, netting Swider approximately $296,450.
So, what is so interesting about these particular trades? They weren’t prearranged. Most insider sales are executed via 10b5-1 plans, which schedule trades months in advance.
Insider selling outside of a 10b5-1 plan is perfectly legal — but it tends to attract more regulatory scrutiny. Moreover, it’s an indication that a company insider made it a priority to sell stock as soon as possible.
While Juhan continues to hold some 220,000 shares, with the sale concluded, Swider has trimmed his stake down to just 28,989 units of Trump Media stock.
At present, no clear catalyst has emerged that would explain why both Juhan and Swider moved to liquidate a part of their stake in the company outside of these plans. However, insiders tend to have an informational edge — so a newsworthy development might well be in the cards.
Despite several promising developments, such as the acquisition of cryptocurrency platform Bakkt, Trump Media stock is still trading in a manner wholly disconnected from its fundamentals — so it remains a risky bet, at best.
Featured image via Shutterstock
