Investors need to be careful because the stock price of Trump Media & Technology Group Corp., the company behind Truth Social, could fall sharply in the near future. This potential drop is linked to upcoming events involving former President Donald Trump, who owns a big part of the company.

In just a few weeks, Trump will be able to turn his shares in the company into cash. Starting September 20, the period preventing Trump and other insiders from selling their shares will end. This happens at a crucial time because Trump is dealing with large legal bills and other financial pressures that might push him to sell some of his $2.6 billion worth of shares.

If Trump decides to sell a lot of shares, it could cause serious problems for the company’s stock. While Trump hasn’t said he plans to sell, doing so might signal that he’s not confident in the company’s future. This could lead to a big drop in the stock price, especially since the stock has already been unpredictable since it went public through a special-purpose acquisition company (SPAC) merger in March.

The company’s stock price has swung wildly, from as high as $79.38 to as low as $22. But these changes have little to do with the company’s actual business, which has been struggling financially. Truth Social hasn’t been doing well—reporting a loss of $344 million in the first half of the year. Most of this loss came from financial instruments called derivatives, while the platform’s user base hasn’t grown enough to make real money.

What’s surprising is how different the company’s market value is compared to its revenue. Even though Trump Media & Technology Group Corp. was once valued as high as $2.6 billion, it has only made about $1.6 million in revenue. This huge gap between what the company is worth and how much money it actually makes is concerning. It suggests that the stock price might be inflated because people are betting on the company’s future rather than looking at its current financial performance.

Truth Social’s business model still hasn’t proven it can be successful in the long run. Although it’s positioned as an alternative to popular social media platforms, it hasn’t attracted enough users to bring in significant advertising revenue, which is essential for the company’s growth. The $1.6 million in revenue is tiny compared to the company’s high market value, raising questions about whether the stock price is based more on hype than on solid financials.

As the company’s stock becomes more tied to Trump’s potential return to politics, any sign that Trump might sell his shares could trigger a massive sell-off. This is particularly worrying because the odds of Trump winning the 2024 election have recently dropped, according to betting markets.

On top of that, Trump’s legal problems are far from over. He’s facing several lawsuits and a criminal trial related to the 2020 election. The costs of these legal battles could push him to sell shares, making the risk of a significant drop in the stock price even higher.

Investors should also keep in mind that the lockup period’s end might coincide with important political and legal events for Trump. His sentencing in a criminal trial is scheduled just days before the lockup period ends, which could lead to major market turbulence.

The big difference between Truth Social’s revenue and its market value, along with the possibility of Trump and other insiders selling their shares, puts investors at risk. It’s important to keep a close eye on what happens next because a major sell-off could seriously impact the company’s stock price.