Trump Media Stock Tumbles as Big Shareholders Are Soon Free to Sell

Former President Donald J. Trump and a handful of other investors are finally going to be able to do what they want with shares in the parent company of Truth Social — the social media platform that has become Mr. Trump’s main online megaphone.

A lockup agreement that had barred those investors from selling their shares expired at 4 p.m. Eastern time on Thursday. The six-month lockup, which applied to all large shareholders of Trump Media & Technology Group, had been in place since the social media company completed its merger with a cash-rich public shell company.

On Thursday, Trump Media’s shares fell nearly 6 percent.

Investors have been focused mostly on Mr. Trump’s plans for his stock. Mr. Trump, the Republican nominee for president, said last week that he had no intention of selling his shares. His major stake in the company, 115 million shares, is worth close to $1.8 billion, and his involvement with Truth Social is critical to its future.

But other large investors, who collectively control more than 20 million shares, may well begin selling once the lockup expires. They include two contestants from “The Apprentice” who helped start Trump Media and a group of early investors in the shell company that Trump Media merged with in March.

Even with Mr. Trump holding tight to his shares, the company’s stock price could slide if those other investors sell. The stock is already down more than 76 percent from its post-merger high six months ago.

Any new shares that are sold into the market will make it easier for bearish investors to short Trump Media’s stock, said S3 Partners. In a report on Thursday, the stock research firm said an increase in shares available to trade may permit short sellers to borrow stock from brokerages in order to close out their positions and book a profit.