(Bloomberg) -- Donald Trump can finally turn his more than $1.5 billion stake in his media company into cash after restrictions preventing him from selling the stock expired Thursday. There are only two problems: Unloading the shares won’t be simple, and he already promised not to do it.

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Trump Media & Technology Group Corp. stock is trading at the lowest price since its soaring debut on March 26, falling as much as 8.2% to $13.50 intraday Friday. Insiders in the company, which owns Trump’s social media outlet Truth Social and went public through a merger with a special purpose acquisition company, had been unable to sell their positions due to a post-offering lockup agreement. Now they can, although the stock’s more than 65% slide over the past two months wiped out upwards of $4 billion in value since mid-July.

Trump, who owns about 60% of the company’s stock, also can begin turning his paper stake into real cash. However, the issues standing in the way of that go beyond his pledge not to unload the shares.

Any sales by Trump would require filings with US regulators. But whether or not investors are tipped off that they’re coming depends on the mechanism of the sales. He could sell a limited amount through open market transactions, which would require some filings with the US Securities and Exchange Commission. Or he could execute a so-called registered share sale, which could keep the details under wraps for a few days. Or he could adopt a scheduled plan, also known as a 10b5-1, which is something advisers would likely recommend.

“Typically, while not always required, affiliates and insiders sell stock via 10b5-1 plans as a matter of best practice and to minimize insider trading risks,” said Paul Karger, managing partner at the financial advisory firm TwinFocus. While any substantial selling would likely “create downward pressure on the stock price,” securities counsel would suggest a structured path, especially given Trump’s nearly 115 million share stake, he added.

Timing Sales

To offload stock in the open market, Trump would have to file paperwork with the SEC confirming his intention, although it could take two business days before any sales — and their size — are reported to regulators, securities lawyers say. If Trump uses this route, he’d be able to sell no more than roughly 8.7 million shares over three months, according to securities law.

The easiest way for Trump to quickly dump stock is through a registered program, which is how private equity can swiftly sell tens of millions of shares. For example, TPG Inc. and Canada Pension Plan Investment Board sold about 30 million shares of Viking Holdings Ltd. this month using this strategy. The timing of how investors would learn about the moves can be murky, a filing is required within two business days and investors can speculate on potential sales, as is common with block trades.

Typically large shareholders would sell stock through a scheduled program, as suggested by Karger, who co-founded TwinFocus to advise ultra-high-net-worth individuals to manage their wealth. That would enable Trump to unload stock over time, but it would also alert investors to the plans.

And then there’s Trump’s statement last week that he has “absolutely no intention of selling,” which sent the shares soaring soaring on Friday that week before tumbling this week.

Regardless of what Trump decides to do, it would take months to offload his position given the size, regulatory requirements and the amount of shares that typically trade. Since Trump Media’s debut, just over 8 million shares on average have changed hands in each trading session. Meaning, if Trump began selling and the transactions accounted for half of the normal trading volume, it’d take more than five weeks for him to get rid of the 114.75 million share stake.

In addition, any sizable sales would flood the market with shares, reducing demand and pressuring the price. It also would signal that he didn’t believe in the company that bears his initials as its stock ticker.

Trump Media co-founders Andy Litinsky and Wes Moss, as well as Patrick Orlando, whose ARC Global Investments II LLC fund backed the blank check that took the company public, can freely sell shares given the size of their positions. Those transactions wouldn’t be immediately disclosed, but investors will be watching trading volume for spikes during Friday’s session.

Over the roughly six months Trump Media has been listed on the Nasdaq, the most active Friday saw 29 million shares change hands in the trading day after Trump’s debate with President Joe Biden. Litinsky and Moss own 7.5 million shares, while Orlando’s stake is almost 8.2 million, data compiled by Bloomberg show. The stock’s daily average volume since the company went public is 8.2 million shares.

Supply And Demand

Any rush for the exits, or the perception of one, would likely hammer the stock.

“The laws of supply and demand cannot be repealed,” said Usha Rodrigues, a professor of corporate law at the University of Georgia School of Law. “An increase in publicly available shares will drive down the price. Thinly traded shares will respond with more volatility. The spikes and troughs will be more extreme.”

Corporate insiders are typically restricted from selling shares for six months after a company goes public to prevent predatory sales. The terms of Trump Media’s deal enabled the lockup to be waived about a week earlier since the stock has held above $12, terms of the deal show.

Shares of Trump Media have been under pressure in recent months as investors positioned for a flood of shares to hit the market. But if the former president wants to monetize his position without crashing the share price, there is an alternative. He could arrange a loan using his stake as collateral, something that’s common for founders and marquee investors whose investments account for the bulk of their wealth.

But for Trump, such a move isn’t cut and dried as it would be for someone like Elon Musk or Mark Zuckerberg. Trump Media’s nearly $3 billion valuation contrasts with a business that brought in less than $1 million in revenue in the second quarter and posted a net loss of $16.4 million. It’s also not as heavily-traded as companies where founders, who are often still involved in day-to-day operations, use shares as pledges for loans.

“It will likely be very difficult to use the stock as collateral given thin volumes, potential volatility,” and regulatory restrictions, Karger said. “Overall performance of the stock is not only subject to market forces, but also to underlying company performance.”

--With assistance from Matt Turner.

(Updates stock move after market open.)

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