Trump's media stock falls before insider trading restrictions lift

By Noel Randewich

(Reuters) - Shares of Donald Trump's media company fell for a second session on Tuesday ahead of the end of restrictions on share sales by the former U.S. president and other insiders.

Trump Media & Technology Group, which is 57% owned by the Republican presidential candidate, fell 3.6%, bringing its loss this week to 7%.

Trump Media's stock jumped 12% on Friday after Trump told reporters he does not plan to sell his now $1.9 billion stake in the company, reversing weeks of steady losses partly due to worries about the end of insider trading restrictions related to its stock market debut in March.

Newly listed companies often see pressure on their stocks ahead of the end of so-called lock-up restrictions due to expectations that insiders may sell their shares and flood the market.

Trump Media, which operates the Truth Social app, saw its value balloon to nearly $10 billion following its Wall Street debut, lifted by retail traders and Trump supporters who see it as a speculative bet on his chances of securing a second four-year term as president.

Other Trump Media insiders who will be allowed to begin selling shares when the lock-up ends include United Atlantic Ventures and Patrick Orlando, whose fund, ARC Global Investments II, sponsored the blank-check company that merged with Trump Media. They own a combined 11% of Trump Media, according to a company filing.

Trump Media's market capitalization on Tuesday stood at $3.3 billion, with shares at $16.68, down about 75% from their March closing peak of over $66. The slide has accelerated in recent weeks after President Joe Biden gave up his reelection bid and Trump lost a lead in opinion polls ahead of the Nov. 5 presidential election.

The company's revenue is equivalent to two Starbucks coffee shops and it is burning cash.

If Trump Media's stock price remains at or above $12 through Thursday, then Trump and other insiders will be free to sell shares beginning on Friday. Otherwise, they are eligible to sell shares beginning on Sept. 26.

(Reporting by Noel Randewich; Editing by David Gregorio)