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The share price of Trump media fell more than 17% in after-hours trading on Tuesday after the owner of the Truth Social app said the registration of additional shares had been declared effective by the Securities and Exchange Commission.
Trump Media, which trades under the ticker symbol DJT, saw its share price plunge nearly 10% on the regular trading day.
The SEC’s statement authorizes early investors in Trump Media to exercise public warrants they hold in the company, of which former President Donald Trump is the majority shareholder.
Trump Media said in a prospectus filed with the SEC on Tuesday that up to 14,375,000 additional shares would be issued upon exercise of those warrants.
The company noted that there could be a “significant decline in the public trading price” of the stock if warrant holders sold their shares or “it was perceived that such sales might occur.”
But Trump Media said existing shareholders who sold at a lower price after registration “could still receive a positive return on the shares … due to the lower price per share” when they purchased them.
The prospectus also stated: “If all of the warrants covered by the registration statement are exercised for cash, [Trump Media] may receive up to total proceeds of approximately $247 million.”
“In addition, $40 million of restricted cash on the Company’s balance sheet will no longer be earmarked as a result of the effective date of the registration statement,” the prospectus states. “These funds would complement the more than $200 million in unrestricted cash the company now retains.”
Trump Media CEO Devin Nunes said in a statement: “Today marks another milestone for Truth Social.”
“With our S-1 declared effective, we believe we are well-positioned to aggressively pursue TV streaming, other platform improvements and possible mergers and acquisitions,” Nunes said.
“With around 620,000 private shareholders supporting our vision, the company looks forward to rapid and strong expansion.”
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2024-06-18 21:13:31
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