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Shares of Trump media closed 4% lower on Tuesday after the company, whose majority owner is former President Donald Trump, said it raised more than $105 million through the cash exercise of warrants.
The proceeds came within 12 days of June 20, two days after the company behind social media platform Truth Social announced that the registration of new shares had been declared effective by the Securities and Exchange Commission.
This declaration permitted the issuance of millions of shares of Trump Media upon the exercise of warrants allowing their holders to purchase shares at a specified price within a specified period of time.
While the maneuver makes money — Trump Media says it will raise about $247 million in proceeds if all warrants are exercised for cash — it also threatens to dilute the company’s stock price by increasing its float.
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In addition to the proceeds from the exercise of the warrants, Trump Media said in a news release on Tuesday that about $41 million in restricted cash “recently unconfined.”
The company, which trades on the Nasdaq under Trump’s initials DJT as its ticker symbol, said it had more than $350 million in cash and no debt on its balance sheet.
Much of that money came before the company completed a merger with blank-check firm Digital World Acquisition Corp. in late March. concluded, allowing Trump Media to trade publicly without having to go through an IPO.
Since its public debut, Trump Media’s stock price has fluctuated dramatically up and down, with massive spikes preceded by weeks of declines and recoveries. Despite its meager revenue, the company has a market cap of several billion dollars and has been labeled a meme stock.
The stock suffered a weeks-long selloff after Trump, who owns about 65% of the company’s shares, was found guilty of 34 counts of falsifying business records in his hush-money trial in New York.
The company has partially recovered from that decline, although shares fell sharply after wild swings the day after Trump’s first debate with President Joe Biden.
On Monday, Trump Media announced that it had been selected for inclusion in the Russell 1000 and Russell 3000 indices.
This is developing news. Please check back for updates.
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2024-07-02 20:01:10
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