Trump-Friendly Truth Social Board to Decide When He Can Cash In

Truth Social’s parent company is set to begin trading Tuesday under the ticker DJT, Trump’s initials. Its market value will be roughly $6.8 billion, making Trump’s approximately 60% stake worth nearly $4 billion.

The timing couldn’t be better for Trump. On Monday, a judge ruled that Trump can pay $175 million to put his $454 million civil fraud judgment on hold during his appeal. Trump hadn’t been able to get a bond to cover the whole judgment.

The $175 million is a fraction of Trump’s newfound wealth, but his shares are just out of reach. Typically people involved in the type of deals that brought Truth Social to the stock market aren’t allowed to sell or borrow against their shares for six months.

The seven-member board would need to grant Trump a waiver if he wished to make such moves before then. That isn’t unheard of, but boards typically wait a month or more before letting a big owner sell. They risk setting off a flood of selling that could cause big losses for independent investors.

“Nobody really knows how it’s going to go, but it will definitely be fascinating to watch,” said Kristi Marvin, founder of SPACInsider, a data and research provider that looks at special-purpose acquisition companies like the one taking Trump’s firm public.

If the board grants Trump a waiver, company rules will limit how much he can sell. Based on the trading volume of the company taking Truth Social public, Trump could still be allowed to sell at least several hundred million dollars worth of stock over a three-month period.

The seven-member group includes Donald Trump Jr. and three former members of the Trump administration: former U.S. Trade Rep. Robert Lighthizer; Kash Patel, a former White House and Pentagon aide whom Trump late in his term considered naming to top positions at the Central Intelligence Agency and the Federal Bureau of Investigation; and Linda McMahon, former head of the Small Business Administration and co-founder of World Wrestling Entertainment  with her husband, Vince.

Devin Nunes, the chief executive officer of Truth Social and a former congressman who defended Trump on the House Intelligence Committee, is also a director. The head of the shell company taking Trump’s firm public, Eric Swider, and a longtime lawyer named W. Kyle Green round out the group. Swider and Green’s ties to Trump aren’t immediately clear.

Green, Lighthizer and McMahon are listed as “independent” directors.

Shannon Devine, a spokeswoman for Truth Social’s parent, said in a statement that this article is “clearly the latest in a long line of sloppy, poorly researched hit pieces on Truth Social by The Wall Street Journal.” She didn’t say what was misleading or inaccurate in the current or previous articles.

Granting Trump a waiver to sell could be risky for the board because he is by far the largest shareholder and the main reason individual investors have been buying the stock. Any signal that he is selling or likely to sell could dent the share price and fuel concerns about Truth Social’s future.

But this is the world of Donald Trump, where things can be upside down. Trump is getting this huge windfall because his supporters have banded together on social media to push up the stock. Shares of the SPAC that will become Truth Social rose 35% on Monday.

These investors want to help Trump. So rather than dump the stock, they could cheer his sales. By keeping the share price high, they could help Trump even more. The former president could receive tens of millions of additional shares if the stock stays above certain levels in the coming weeks.