Former President Donald Trump may soon begin selling off his multibillion-dollar stake in his fledgling social media startup. Trump media.

But the potential payday – Trump’s stake represents more than half of his net worth on paper, according to Forbes – poses risks for both the Republican presidential candidate and his company.

Trump owns 114,750,000 shares, or nearly 59 percent, of Trump Media, which owns the social media platform Truth Social. As of Thursday, his stake was worth just over $2.6 billion.

But Trump and others who received shares in the company before the IPO are prohibited from selling their shares for about 180 days due to a “lock-up agreement.”

These provisions are a common feature of IPOs and are designed to prevent corporate insiders from cashing in on their shares as soon as a company goes public. This helps keep the stock stable and marketable to investors during its first few months on the market.

Trump Media debuted on the Nasdaq under the ticker DJT At the end of March, after a lengthy merger process with a special purpose acquisition company.

The curfew, which came into force after the merger of the two companies, is scheduled to end on September 25.

They could also be raised sooner if the stock price stays at or above $12 per share for 20 trading days within the 30-day period beginning Friday, according to the company’s regulatory filings.

If DJT shares stay above this price point – and that is likely – the lock-up period could expire as early as September 20.

What happens next is anyone’s guess.

Trump has not commented on what he plans to do with his stocks after the freeze is lifted, and a Trump Media spokeswoman did not respond to CNBC’s questions on the matter.

A spokesman for Trump’s presidential campaign referred inquiries about Trump’s stocks to Trump Media.

“If I were to speculate, I would speculate on the downside, not the upside,” said Daniel Bradley, a professor of finance at the University of South Florida.

This view has “absolutely nothing to do with my political views,” he noted, and “everything to do with purely economic aspects.”

If Trump decides to sell all or part of his stake, he could have difficulty finding buyers – and that possibility alone could impact the stock price.

“If there are not enough buyers, the share price will ultimately have to fall significantly,” Bradley said.

Trump Media noted in a filing with the U.S. Securities and Exchange Commission (SEC) that after the lock-up period is lifted, the sale of a “substantial number of shares” of its common stock “could occur at any time.”

“These sales, or the perception in the market that holders of a large number of shares intend to sell shares, could lower the market price” of DJT shares, the filing said.

If Trump were to sell the stock, he would be required to disclose the transaction in a regulatory filing within two business days.

However, a “significant number of insiders” violate SEC reporting requirements by reporting open market transactions after the statutory deadline, according to a 2023 study in the Journal of Financial and Quantitative Analysis.

Selling his shares could provide a significant financial boost for Trump, as he is battling hundreds of millions of dollars in fines and has reportedly already racked up more than $100 million in legal fees.

However, it would also likely weaken investor confidence in Trump Media, as Truth Social points out that Truth Social’s success depends at least in part on the popularity and reputation of Trump, its main attraction.

Investing in the company was seen as a way to support Trump or bet on his chances of defeating Vice President Kamala Harris in the presidential election.

Trump benefited from this meme stock dynamic: Even though Trump Media’s share price has fluctuated sharply over the past five months, its market capitalization of several billion dollars has remained consistently high in relation to its low revenues.

After Trump survived an assassination attempt at a campaign rally in mid-July, betting markets pushed his chances of winning the election up. On the next trading day, Trump Media shares rose by more than 30 percent.

But the company’s shares have suffered a massive slide in recent weeks – at the same time that Harris turned the 2024 election campaign on its head by replacing President Joe Biden as the Democratic candidate.

While earlier polls showed Trump extending his lead over Biden, more recent polls show Harris narrowing the gap or overtaking Trump, both nationally and in key swing states.

And despite the price fluctuations, Trump Media’s stock price had fallen 71 percent from its post-merger high of nearly $80 per share by Thursday’s close.

That could be because the company’s only product, Truth Social, generates relatively little traffic and advertising revenue compared to established social media giants like X and Facebook. Financial experts have said Trump Media’s astronomically high valuation does not correlate with its fundamentals.

Trump Media is “at this point a pure proxy for a Trump victory in the White House,” says Matthew Tuttle, CEO of Tuttle Capital Management. said Politico.

If Trump wins the election, “stocks will be more valuable,” said Bradley of the University of South Florida.

But the opposite is also true, says Tuttle. Trump’s recent missteps in the election campaign have “severely affected his stock prices.”