Trump about to hit the jackpot with Truth Social – but that won't save him from ruin

Former President Donald Trump is about to hit the jackpot with Truth Social, but he might not be able to use that windfall to save himself from his financial crunch.

Investors are expected to approve an agreement Friday to take Trump Media & Technology Group public, which would set up a multibillion-dollar payout for the former president, but his stake in the company that operates Truth Social would be locked down for most of the year to prevent shares from tanking, reported Politico.

“It’s simply trading on Trump’s name,” said Kristi Marvin, founder of the research firm SPACInsider. “People aren’t buying this because they like the fundamentals — they’re buying this because they like Trump.”

Trump's stake would be frozen under what's known as a lock-up agreement, which prevents insiders from selling off their shares just as a company goes public, and even if he obtained a waiver the former president couldn't sell more than about 1 percent of his outstanding shares every quarter.

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If he eventually unloads even more than that to meet more than half a billion in civil penalties imposed against him for fraud, defamation and sex abuse, Trump could completely tank the value of the company.

Trump Media & Technology Group’s “success depends in part on the popularity of its brand and the reputation and popularity of its Chairman, President Donald J. Trump,” said its would-be partner Digital World in a February filing.

The ex-president must hold onto his shares for six months and ride out impulsive “MAGA meme stock investors,” said Boston College law professor Brian Quinn.

“By the time Trump is able to start selling his shares, I doubt they will be worth much,” Quinn said. “Certainly less than his present requirements.”