Shares of the company behind media platform Truth Social have soared in recent weeks as election predictions shifted in former President Donald Trump’s favor.
The thesis for Trump Media and Technology Group (TMTG) investors is that if Trump wins in November, the media company that bears his name will become extremely valuable. That’s what it is. But Matthew Tuttle, CEO of Tuttle Capital Management, said that logic would no longer hold if Trump loses.
“If Trump loses, I think it will end up being zero,” Tuttle told Fortune.
This could pose financial problems for the former president. Trump’s stock in Trump Media accounts for the bulk of his personal wealth. They helped push the Republican candidate’s net worth to an all-time high. The Wall Street Journal estimates that Trump’s current net worth is between $7.5 billion and $10 billion.
Mr. Trump currently owns about 60% of the company’s stock, valued at about $4.3 billion based on the company’s current stock price of $38. To date, President Trump has not sold any shares in the company. But Tuttle believes that will change if Trump appears to lose the election.
“I don’t think he’ll be involved in it,” said Tuttle, who personally owns a put option on TMTG. “He will have to sell his shares to pay his legal costs.”
Trump previously served as chairman of TMTG, but currently has no role at the company. TMTG did not respond to requests for comment.
The former president is on trial in several criminal cases across the United States. In Georgia, Mr. Trump is facing charges related to his alleged attempt to persuade state election officials to add votes in his favor to give him more votes than President Joe Biden. Trump was also charged in two federal cases in which he is accused of leading a conspiracy to overturn the 2020 election by smuggling classified documents to his Mar-a-Lago golf resort in Palm Beach. In New York, Trump was convicted of 34 felony counts of falsifying business records. He is currently on appeal.
“If he loses, my sense is that they’re going to pursue him with all these lawsuits and ultimately be forced to sell,” Tuttle said. “When and how will depend on his cash flow, but it won’t be easy. And once people see him coming, it’s going to be a bloodbath.”
Even though President Trump’s TMTG stock has brought him enormous wealth, selling it will be a difficult task. Mr. Trump currently owns about 114.5 million shares, which are so expensive that selling them on the public market would almost certainly result in a fire sale. Perhaps Mr. Trump will manage to sell just a portion of his company’s stock before the stock market bottoms out and the remaining shares are effectively worthless. Tuttle believes Trump will need to find an institutional investor to buy the entire block of stocks at a “deep discount.”
If Trump wins the election, which is certainly possible given the closeness of the race, TMTG investors will be cashing in all at once. “I expect the stock price to fall quickly as everyone who bought before the election takes profits,” Tuttle said.
Although it initially fell as investors took profits, TMTG could still represent a long-term buy in the second Trump administration. “I think President Trump has a chance to make something out of this company, and I think he will continue to be in the news,” Tuttle wrote.
In that case, Mr. Trump is likely to own TMTG stock. Conflicts of interest typically arise when a sitting president holds ownership stakes in media companies. But Tuttle says Trump is an exception. “I think it’s going to work out because Trump is a conflict of interest, as is anyone but Trump,” he said.
