If Trump sells his DJT stock, here's what could happen within weeks.

• Soon, former President Donald Trump will be able to sell shares of Trump Media, the company he owns.
• Trump owns nearly 59% of Truth Social, the social media platform he founded.
• In late March, Trump Media went public on the Nasdaq as DJT after merging with a special purpose acquisition company.

Soon, former President Donald Trump will be able to sell his multibillion-dollar stake in his social media startup.

The potential payday for Trump's stake, which accounts for more than half of his net worth, poses risks for both him and his company.

Nearly 59% of Truth Social, the social media platform owned by Trump Media, is held by Trump, who owns 114,750,000 shares. As of Thursday, his stake was worth slightly more than $2.6 billion.

Under a "lock-up agreement," Trump and other shareholders who received stock in the company before it went public are prohibited from selling any of their shares for approximately 180 days.

IPOs typically include provisions to prevent insiders from immediately selling their shares, which helps maintain the stock's stability and marketability during its initial months on the market.

In late March, Trump Media launched on the Nasdaq under the ticker symbol after completing a long merger process with a special purpose acquisition company.

The lock-up restrictions, initiated following the merger of businesses, will expire on Sept. 25.

If the stock price remains at or above $12 per share for at least 20 trading days during the 30-day period beginning on Friday, as stated in the company's regulatory filings, they could be lifted earlier.

If shares of DJT remain above this price point, it seems likely that the lock-up could expire as soon as Sept. 20.

What happens after that is anyone's guess.

Trump has not disclosed his plans for his shares after the lock-up period ends, and a representative from Trump Media declined to comment on the matter when asked by CNBC.

Trump Media referred inquiries about Trump's stock to a spokesman for his presidential campaign.

Daniel Bradley, a professor of finance at University of South Florida, stated that if he were to speculate, he would focus on the negative rather than the positive side.

He stated that his political views were not related to that view, but rather it was solely based on economics.

If Trump sells

If he decides to sell all or a portion of his stake, Trump may face difficulty in finding buyers, which could potentially impact the share price.

If there are insufficient buyers, then the stock price will have to fall substantially, according to Bradley.

The sale of a substantial number of shares of Trump Media's common stock could occur at any time once the lock-up lifts, according to a Securities and Exchange Commission filing.

The perception that large shareholders intend to sell shares could lower the market price of DJT stock, according to the filing.

If Trump sells, he must disclose the transaction in a regulatory form within two business days.

According to a 2023 study in the Journal of Financial and Quantitative Analysis, a "significant number of insiders" violate the SEC reporting requirements by filing open-market transactions after the legally required deadline.

Trump could receive a significant financial benefit from cashing out his stake, as he is currently facing hundreds of millions of dollars in legal penalties and has already incurred over $100 million in legal fees.

The success of Truth Social is dependent on the popularity and reputation of Trump, which may negatively impact investor confidence in Trump Media.

Supporting Trump through investment in the company has been viewed as a means of backing his chances of defeating Vice President Kamala Harris in the presidential election.

Despite the volatility of Trump Media's stock price over the past five months, its market capitalization has remained consistently high compared to its revenue.

Following the assassination attempt on Trump during his campaign rally in July, betting markets increased his chances of winning the election. The next day, Trump Media's stock price jumped by more than 30%.

The company has experienced a significant decline in stock prices recently, coinciding with the upheaval in the 2024 presidential race when Vice President Joe Biden was replaced as the Democratic nominee by Harris.

Recent polls indicate that Harris is closing the gap with Trump or even surpassing him in certain swing states, while earlier polls showed Trump's lead over Biden increasing.

Despite its fluctuating price, as of Thursday's close, Trump Media's stock has decreased by 71% from its post-merger high of approximately $80 per share.

Despite generating minimal traffic and revenue, Trump Media's valuation remains high. Financial experts argue that the company's valuation does not align with its fundamentals.

According to Politico, Matthew Tuttle, CEO of Tuttle Capital Management, stated that Trump Media is currently functioning as a "pure play proxy" for Trump's successful bid for the White House.

If Trump wins the election, the shares will be more valuable, according to Bradley of the University of South Florida.

Tuttle stated that Trump's recent missteps on the campaign trail have been negatively impacting the stock market.