Updated on: October 11, 2024 8:39 pm GMT
Former President Donald Trump is expressing frustration with Nasdaq after its routine halt of stock trading related to his media company, Trump Media & Technology Group (TMTG). The stock, trading under the ticker symbol DJT, experienced rapid fluctuations on Friday, leading to significant trading pauses that Trump has described as politically motivated interference.
Trump’s reaction comes in light of a 25% surge in stock value following his announcement that he would not sell any of his shares. Amid fears of a potential sell-off due to an impending lock-up expiration, investors initially responded positively to his statements. This sharp increase triggered Nasdaq’s automatic trading halts—standard protocol designed to manage excessive volatility.
Nasdaq Trading Halts Explained
- What Happened:
– Trading of DJT shares was halted twice on Friday following a notable price spike.
– The first halt occurred at 2:26 p.m. ET, shortly after Trump’s press conference, resuming at 2:31 p.m.
– A second halt took place at 2:34 p.m. ET, both lasting five minutes each.
- Regulatory Mechanisms:
- These halts are part of SEC-mandated mechanisms called ‘Limit up/Limit down,’ aimed at curbing extreme price volatility.
– Joe Saluzzi, a market structure expert, highlighted that such pauses are common occurrences across all U.S. exchanges and serve to protect market stability.
Trump’s Stock Surge and Concerns
The stock price of TMTG had been under pressure for months, with a significant decline of approximately $4 billion in Trump’s personal holdings due to this slump. On September 11, the day after Trump’s debate with Vice President Kamala Harris, the stock hit a record low.
Key Highlights:
- Trump announced during a press conference that he has ”absolutely no intention of selling” his shares.
- Following this announcement, DJT’s price soared by $1.89, or about 12%, to close at $17.97.
- Despite the rebound, TMTG’s shares remain about 77% lower than their peak of $79.38 in March.
Lock-Up Provision Impact
The surge in stock price comes as TMTG faces the expiration of a lock-up provision on September 19, which restricts Trump and insiders from selling shares. This provision is standard in public offerings and is intended to prevent large-scale sell-offs shortly after a company goes public, allowing the market to stabilize.
- Concerns Ahead:
– If Trump were to sell even a fraction of his 60% stake in TMTG, it could flood the market with available shares, significantly driving down the stock price.
– Trump attributed the market’s uncertainty primarily to fears regarding this upcoming lock-up expiration.
Trump’s Threat Against Nasdaq
In his posts on Truth Social, Trump expressed anger at Nasdaq, questioning their authority to pause trading and insinuating that they were “taking orders from the SEC.” He has threatened to move the trading of DJT shares to the New York Stock Exchange (NYSE) if the halts continue.
- Trump stated: “I am going to hold NASDAQ, and maybe the SEC, liable for doing what they are doing.”
- Saluzzi noted that moving to the NYSE would not change the regulatory oversight, as both exchanges adhere to SEC rules.
Summary of Stock Performance
Trump Media & Technology Group’s recent fluctuation sheds light on the volatile nature of tech stocks and the particular challenges facing social media platforms in the current market environment. Here is a summary of key stock performance indicators:
| Date | Stock Price (DJT) | % Change |
|—————–|——————|——————|
| March (Peak) | $79.38 | - |
| September 11 | Record Low | – |
| September 13 | $17.97 | +12% |
Despite the current challenges, Trump’s firm stance against selling shares may offer some reassurance to investors concerned about future fluctuations.
Conclusion
Former President Donald Trump is still an important name in finance and stock trading, especially with his company, Trump’s Media & Technology Group. As he faces challenges with Nasdaq, many people are paying attention to how the market and regulators react. A key moment will come soon when a special rule about trading will end. This will be very important for TMTG as it figures out its path in the stock market.