Truth Social reaches a tricky milestone. Will Donald Trump cash out his stake?

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Former President Trump speaks during a campaign rally on Wednesday. Trump, who owns more than half of Truth Social's parent company, is now facing a decision over whether to start selling off his $2 billion stake. / Getty Images North America

Trump Media's future is becoming even more uncertain.

The parent company of Truth Social, the social media company majority-owned by former president Donald Trump, is turning a complicated corner on Thursday. A lockup on insider sales is due to expire—meaning that Trump could start cashing in his 57% stake, which is currently valued at about $2 billion.

Shares in Trump Media fell more than 4% on Thursday morning, at one point hitting an all-time low of $14.77. The share price is down nearly 80% since Trump Media went public in March. (The stock trades under the ticker DJT, for "Donald J. Trump.")

Trump said last week that he has "absolutely no intention of selling" his stake in Truth Social. Some investors take him at his word, at least for the time being, since such a sale would likely further depress the price of Trump Media's shares.

"The stock price of Truth Social is like his crowd size," said professional investor Matthew Tuttle, in a reference to Trump's ongoing fixation with the attendance at his rallies and other campaign events.

"He's not going to want to see the stock price go down. And if he sells, it is going to do down," says Tuttle, who runs the investment firm Tuttle Capital Management, and who used to trade the Trump Media stock personally.

But now that the lockup is expiring, Trump is free to eventually change his mind and cash in some of his stock.

Trump Media did not respond to a request for comment from NPR.

Truth Social's future is also tied to the election

Trump Media is a quintessential meme stock, bought and sold more for what it stands for than for any underlying business performance.

The company reported a loss of more than $16 million in its most recent quarterly earnings, and there are signs that demand for its core product is waning. Trump started Truth Social as a conservative social-media network in 2022, after he was banned from Twitter.

But since Elon Musk has taken over Twitter, now X, Trump has been welcomed back. Earlier this week, the former president even debuted his latest business venture, a crypto platform, with an interview on X.

Many investors in Trump Media are the former president's most loyal supporters, so the company's share performance has become a Wall Street weathervane for how investors think Trump's election campaign is going.

The shares rallied in July, after Trump survived an assassination attempt and while he was still running against President Biden. But last week, the shares plunged in the wake of Trump's debate with Vice President Harris.

Ultimately, the future of Truth Social will likely hinge on the outcome of the election. Its shares will likely do better if Trump wins in November, even if his ownership of the business would raise major concerns about conflicts of interest.

However, if Trump loses in November, the outcome will likely be bad news for Truth Social and its other investors.

Trading Trump Media's stock today "is entirely an election play on whether he gets elected or not," says Tuttle. "This zooms up if he wins—and it eventually goes to zero if he loses."