Diving certificate:

• Phillip Juhan, CFO of Trump Media, which owns Truth Social, recently sold about $1.9 million worth of company stock, which was returned to the company “solely to cover withholding tax payments to the appropriate tax authorities,” according to a recent securities filing.
• Other key company executives, including CEO Devin Nunes, Chief Operating Officer Andrew Northwall and General Counsel Scott Glabe, also sold certain amounts of their company shares, also to cover withholding taxes, according to SEC filings. The sales came after the company’s audit committee approved the repurchase of “an aggregate of 128,138 shares of the company’s common stock from certain officers” at a share price of $22.7, according to an SEC filing.
• News of the buyback program comes just before the expiration of a six-month lock-up period for former President Donald Trump to sell his own shares in Sarasota, Florida-based Trump Media. The former president owns 114.75 million shares of Trump Media, or about 60% of the outstanding shares, according to a report from Quartz.

Diving insight:

According to a report by CNBC, Trump, CEO Nunes and CFO Juhan were among the executives who were barred from selling their common stock for six months after the company went public in March through a merger with a special acquisition company.

According to a recent report from Quartz, Trump could sell his shares for about $2 million, but the move would likely drive the company’s already declining value even further down the drain. The company’s stock price has continued to fall amid election turmoil and ongoing litigation in Delaware and Florida that has further strained the Truth Social owner’s already cash-strapped finances.

Although the company has taken steps to improve its flagging results, signed a TV streaming deal and ended the second quarter debt-free, it reported a net loss of about $16.4 million on revenue of $837,000 for the quarter ended June 30. It had posted a net loss of $22.8 million in the year-ago period, according to its most recent earnings results.

During the quarter, Trump Media also reported notable expenses, such as paying $602,000 in accounting fees, including the cost of “re-auditing TMTG’s results for fiscal years 2022 and 2023 after the company hired a new auditor,” according to the results. The company fired its previous auditor, BF Borgers, in May after the company received a $12 million civil penalty from the SEC for conducting sham audits, CFO Dive previously reported.

The company’s quarterly losses come after it reported a net loss of $58 million last year, while revenue was just $4.1 million. However, many of its executives still received millions in payments last year, mostly due to stock grants, CNBC previously reported.

Juhan, Northwall and Nunes received promissory notes when the company was private, the value of which automatically converted into company stock when it went public, according to an April report by CNBC. Juhan received a promissory note for $4.9 million, Nunes received a note for $1.15 million and $200,000 was earmarked for Northwall.

Both Nunes and Juhan received relatively low base salaries last year — $750,000 for Nunes and $300,000 for Juhan — but relatively high shares of company stock. This mix reportedly reflects an ongoing trend in executive compensation that emphasizes long-term performance incentives.

What’s particularly notable is that Juhan’s holdings in Trump Media far exceed Nunes’, according to company filings. Juhan owns 405,059 shares after the Aug. 22 transaction, while Nunes owns 87,154 after the sale.

In connection with the share transfer approved on August 22, “the Company will remit $2,908,708, plus applicable penalties and interest, to the IRS and certain state tax authorities in connection with the issuance of the TMTG Executive Promissory Notes on March 7, 2024,” the filing states.

Trump Media did not immediately respond to requests for comment.