Presidents can move entire markets with a single sentence. Donald Trump, a former president, sent a single stock soaring with just three words: “I’m not selling,” he pronounced at a press conference on Sept. 13, when asked whether he would offload the millions of shares he owns in his social media company. Buoyed by this declaration of faith from its largest shareholder, the stock shot up 27% to $20.76, before closing the day at $17.97.

Later this month, for the first time since Trump Media & Technology Group (TMTG)—which owns Truth Social—went public, Trump will be allowed to sell his shares in the company. As the former chair of TMTG and a major insider, Trump is subject to a “lockup” provision that prevents insiders from selling stock in the newly public company before a certain date.

The lockup period for Trump, who owns about 57% of TMTG and is its largest stakeholder, will expire on Sept. 25 at the latest. If TMTG’s stock remains above $12, the lockup could end as early as Thursday, Sept. 19—a feat that looks increasingly likely. The price hasn’t dropped below $15 on any trading day since Aug. 22.

Trump currently owns 114.5 million shares of TMTG (ticker symbol: DJT), which are worth about $1.85 billion.

Trump’s stake in TMTG is likely a significant portion of his wealth. Forbes estimates Trump’s net worth to be about $3.7 billion, meaning the paper value of his TMTG shares would account for about 50% of his total wealth. Of course, as with anyone whose wealth is tied up in company stock, Trump’s net worth can fluctuate regularly with changes in the share price.

Trump cannot sell too much, too soon—in theory

As the lockup expiry date approaches, Fortune looked through dozens of SEC disclosures to examine the condition of TMTG. We found a company with a market cap of $3.1 billion—an almost inexplicable valuation given that the underlying enterprise is no larger than the size of a small family business. It has declining revenues, no profits, and is embroiled in multiple lawsuits. The company even confesses it made material misstatements in its financials reporting with no clear timeline of when it will be able to remedy them.

And—crucially for the company and anyone holding its shares—its future is largely tied up with the decisions of its largest individual shareholder: Donald Trump. The filings acknowledge Trump’s personal financial interests may hurt his investors because he has a right to vote his shares in ways that “may not always be in the interests of the Combined Entity’s stockholders generally.”

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Insiders at newly public companies approaching the end of a lockup period will often communicate with the board to devise a plan to sell their stake incrementally over time and avoid a free-for-all in the market, according to Michael Ewens, a finance professor at Columbia Business School. “Everyone realizes selling it all is bad,” he says. “There’s a good reason for that; they don’t want the share price to tank.”

If insiders, especially Trump, rushed to offload as many shares as possible when the lockup period ended it would trigger a fire sale. Shareholders, many of whom are retail investors who bought the stock as a show of support for Trump, could see their investments greatly devalued or wiped out. But, as the largest shareholder of the company, no one would have more to lose from a cratering TMTG share price than Trump. The ensuing price drop could make whatever shares he wasn’t able to sell almost worthless, according to Jay Ritter, a professor at the University of Florida Warrington College of Business who studies public offerings.

But holding on to TMTG stock poses its own set of risks, namely that its share price appears entirely divorced from its underlying business results, trading mostly on the fervent devotion Trump inspires in his followers rather than any market fundamentals. That means Trump, as by far the largest shareholder, is caught between a rock and hard place. He can flood the market with shares knowing that whatever he doesn’t manage to sell will be worth a fraction of their original value. Or he can hold on to them and face the daunting prospect of turning TMTG and Truth Social into a genuine tech and media business.

TMTG’s shaky financial footing

Thus far, TMTG’s financial performance has been modest.

The company made revenues of just $1.6 million in the first half of 2024, a decline of 30% from the year before. It posted a net loss of $344 million for the period, as total costs rose 1,104% from $9.8 million to $118.5 million, according to TMTG’s latest quarterly earnings report.

To shore up its finances, TMTG struck a deal on July 3 to sell up to $2.5 billion worth of stock to Yorkville Advisors, a New Jersey investment firm that works with small- and micro-cap companies. The deal, a “standby equity purchase agreement,” is common among new companies. Essentially, it gives TMTG a guaranteed buyer if it issues new shares and a means to put cash on its balance sheet, while Yorkville gets the right to purchase discounted stock. In this case, Yorkville will pay 97.25% of the share price, which it can then turn around and sell at full price on the open market. Over the three-year term of the deal, TMTG will have sole discretion over when to issue shares that Yorkville can purchase, according to the agreement.

The deal limits Yorkville to 19.99% of TMTG’s outstanding shares, which as of July—when the deal was signed—was 37 million shares, worth $680 million. TMTG can also request advances. And the deal isn’t exclusive, meaning TMTG can still raise capital from other sources. In striking the deal, TMTG paid Yorkville a $25,000 structuring fee and issued 200,000 shares to Yorkville, currently worth $3.9 million, as a commitment fee.

“I see no reason why Yorkville would not want to immediately resell the shares, rather than expose itself to the risk of a stock price decline,” Ritter said. “Yorkville appears to be in a situation in which it can make some money as a middleman without exposing itself to much risk.”

While an equity purchase agreement isn’t unusual for a newly public company, its choice of investor does raise questions, according to Francine McKenna, a former public accountant at KPMG and PwC. Among them: “who those people are, who is part of that deal, who’s part of that insider group?,” McKenna said. “And in this case, you have Yorkville Advisors as part of the insider group. I would say they’re not Morgan Stanley or Goldman Sachs.”

In the past, Yorkville’s founder and president Mark Angelo had run-ins with regulators in Italy and Switzerland, according to disclosures made to the SEC. In 2015, Angelo and Yorkville Advisors were fined $135,000 by the Italian financial regulator the Commissione Nazionale per le Società e la Borsa for failing to make a public tender offer to buy the shares of certain shareholders involved in a deal. In 2022, Yorkville settled with the Swiss Federal Department of Finance for $82,515 over claims it didn’t properly disclose derivative holdings in three Swiss-listed companies.

A spokesperson for Yorkville Advisors declined to comment on the equity purchase agreement with TMTG, saying it “does not respond to inquiries from the press with respect to its business transactions.” The spokesperson described the fine from Italian regulators as a “technical violation in reliance on advice provided by Yorkville’s outside Italian counsel.” Yorkville did not respond to follow-up questions from Fortune about the settlement with Swiss regulators.

Fortune also sent TMTG a detailed set of questions regarding the statements made in its SEC filings, its financing deal with Yorkville Advisors, whether company insiders and the board had discussed plans regarding the end of the lockup period, and the company’s overall strategy. The company responded by questioning Fortune’s journalistic methods:

“By cherrypicking statements from our filings while omitting all countervailing information, and touting quotes from supposed experts who just happen to support all the reporter’s biases, Fortune offers a great lesson in how to manufacture fake news,” the spokesperson said.

A dispute among TMTG’s cofounders

TMTG was founded shortly after Trump left the White House in 2021. Two former contestants on The Apprentice, Wesley Moss and Andrew Litinsky, approached Trump with the idea to start their own social media site since he had recently been banned from mainstream platforms in the wake of Jan. 6.

Moss and Litinisky secured Trump’s approval to use his brand to bolster Truth Social, their nascent, conservative alternative to X (formerly Twitter). In return, a company they set up, United Atlantic Ventures (UAV), received an 8.6% equity stake in TMTG. In October 2021, TMTG agreed to go public via a “special purpose acquisition company” (SPAC) called Digital World Acquisition (DWAC), helmed by Florida investor Patrick Orlando.

TMTG wouldn’t end up going public until March 2024 after the deal got tied up in an SEC investigation. The SEC eventually alleged in an ongoing lawsuit that Orlando made material misrepresentations on disclosure forms when he said he didn’t have any intended acquisition targets, despite having already held “numerous lengthy discussions” with TMTG representatives. SPACs are generally not allowed to pre-coordinate with other companies.

“The lawsuits that were surrounding various parts of [the SPAC deal], and the SEC investigation slowing it down for so long, was unusual,” said Usha Rodrigues, a professor of corporate finance and securities law at the University of Georgia Law School, and an expert in SPACs. SPACs are “supposed to be blank-check companies where you really don’t have an intended target at the outset,” she said.

Earlier this month the judge in the case, Christopher R. Cooper of the U.S. District Court of D.C., granted Orlando’s lawyers’ request for a 30-day extension to respond to the SEC’s initial complaint.

Orlando did not respond to a request for comment sent via LinkedIn and multiple emails sent to his lawyers.

Those weren’t the only legal disputes plaguing TMTG. In February, Litinsky and Moss sued TMTG for allegedly withholding their 8.6% stake in the company by attempting to dilute their equity by issuing one billion new shares, including 900 million that would be designated as voting stock, according to the lawsuit. Doing so, Litinsky and Moss allege, was against the conditions of their original contract with Trump and TMTG (then called Trump Media Group Corp.), which granted them the right to approve both the issuance of new shares and the creation of any new classes of stock.

In response TMTG sued Litinsky and Moss’s company UAV a month later, claiming it was justified in doing so because the pair botched the company’s public offering, leading to a years-long delay. The two “failed spectacularly at every turn,” the suit alleges. In September the two won a separate case and the right to sell their shares on the open market. (Lawyers for Litinsky and Moss did not respond to multiple requests for comment).

TMTG’s risk factors include at least seven lawsuits against the company and Donald Trump

All companies are required by law to disclose possible risks to their business, even risks that seem remote. Most companies’ risks revolve around competitive or regulatory threats to their business models. But the risks at TMTG are unusual because they are tied to the popularity of one man.

The company’s management acknowledged in an SEC filing that Trump’s personal legal issues—one of which resulted in 34 felony convictions that Trump is currently appealing—leaves the company’s future hanging in the balance. The outcome of any one of the at least seven different criminal and civil court cases involving Trump could determine the success of a company with already precarious finances. While TMTG is not involved in any of these cases, the company says it “cannot predict” what effects “an adverse outcome” might have on Trump’s personal reputation and therefore its business, according to the same SEC filing.

In its discussion of the risks Trump’s legal troubles pose, TMTG cited a 2016 USA Today article that found the former president and his various businesses had been involved in roughly 3,500 lawsuits over 30 years. Trump had been a plaintiff in 1,900 of those cases, a defendant in 1,450, and in 150 he had either been a third party or involved in a bankruptcy proceeding.

In fact, throughout its official documents TMTG admits that much of its future hinges on Trump and Trump alone. TMTG cites Trump extensively as one of its risk factors, citing the possibility that the company’s fate is tied to his political fortunes, according to the SEC filings.

“Success depends in part on the popularity of our brand and the reputation and popularity of President Donald J. Trump,” one document reads. “The value of TMTG’s brand may diminish if the popularity of President Trump were to suffer.”

Should the focus of TMTG’s majority shareholder and pitchman waver, the company’s fortunes might falter. “If President Donald J. Trump were to cease to be able to devote substantial time to Truth Social, TMTG’s business would be adversely affected,” the SEC filings say.

TMTG also highlights Trump’s history of bankruptcies. TMTG is hardly the first venture to carry the Trump name, which can still be found on buildings across the world. Between 1991 and 1992 Trump’s Atlantic City casinos—the Trump Taj Mahal, the Trump Castle, and the Trump Plaza—all filed for bankruptcy.

Businesses that carried the Trump name via a licensing deal didn’t fare much better. Trump Steaks discontinued sales after just two months, Trump Mortgage, and Go.Trump.com—a Trump-branded travel site—were both founded in 2006 and shuttered by 2007.

Another of Trump’s online companies, Trump University, closed in 2011 amid a series of lawsuits that alleged students were deceived by false advertisements. In 2018, a federal court approved a $25 million settlement against Trump University.

Of each of those businesses, TMTG said “there can be no guarantee that TMTG’s performance will exceed the performance of those entities,” according to SEC filings.

Threats on the outside, and ‘material weaknesses’ on the inside

While dealing with the external threats posed by its numerous legal proceedings, TMTG is also grappling with an internal problem, one that officers of the company acknowledged they are struggling to rectify: properly accounting for TMTG’s finances. Any issues with a public company’s bookkeeping, referred to as “material weaknesses,” pose serious problems to investors, who rely on financial information being accurate.

When TMTG went public earlier this year executives realized the company did not have sufficient qualified personnel to meet the SEC’s reporting standards, according to an SEC filing made about two months after it went public. TMTG is currently trying to fix that. “These remediation measures will be time consuming, incur significant costs, and place significant demands on our financial and operational resources,” the same disclosure says.

Such issues are more common in startups and newly public companies because those types of firms have fewer resources and are not as experienced operating under SEC guidelines, according to Jason Schloetzer, an accounting professor at the McDonough School of Business at Georgetown University. “These weaknesses can lead to reduced investor confidence, increased regulatory scrutiny, and governance challenges, such as inadequate board oversight of the financial reporting process,” Schloetzer said.

What if DJT is just a meme stock worth only $1.50 a share?

It is not unusual for a company’s stock price to race ahead of reality. Lots of companies have over-inflated stock prices. This year, for instance, Big Tech stocks hit new highs based on the mostly unrealized promise that artificial intelligence will usher in a new age of productivity. But there is a difference between that type of hype—which is based on businesses that have underlying sales growth—and the situation at TMTG, where revenues are declining and losses are worsening.

The extensive risks outlined in TMTG’s own documents, combined with its sagging financial performance, raise questions about whether its current trading price is sustainable. The most common explanation is that TMTG is a meme stock, whose performance is based on the excitement of retail investors rather than sound fundamentals.

“A meme stock is almost by definition, not tied to economic realities,” said Rodrigues, the SPAC expert. “They trade on momentum, emotion, and rumor.”

In the case of TMTG the stock moves on news of its majority shareholder—Trump, according to Ritter, the UF professor and IPO researcher. “Meme stocks thrive on attention, so the stock might jump if there is news about the company or Donald Trump, even if the news is not necessarily good news,” he said.

As the stock moves with Trump’s news coverage, favorable or not, TMTG’s outlook remains a head-scratcher. TMTG’s current market price of $16.14 per share is grossly overinflated, roughly 90% higher than its fair market value of $1.50 it should be trading at if one were to look at the company’s cash per share, according to Ritter. By Ritter’s calculations, for TMTG to live up to the $4 billion valuation currently implied by its stock price it would have to generate sustainable earnings of $200 million a year. But TMTG’s current financial performance is far off that mark and there’s “no evidence” the company has a plan to start pulling in annual profits at those levels, according to Ritter.

“The only bull case for the stock that I can think of is the greater fool theory of investing: you can make money by buying an overvalued stock if you can find an even greater fool who is willing to buy it from you at an even more-inflated price,” Ritter said.

This story was originally featured on Fortune.com