Trump Media (NASDAQ:DJT) may see its shares move tomorrow as the company announces an all-stock deal to acquire most of WorldConnect Technologies’ (WCT) assets. This strategic move will help Trump Media establish its content distribution network (CDN) for streaming TV, starting with the Truth Social platform before expanding to other platforms. The plan was outlined in April as part of a three-step strategy to introduce live TV to Truth Social.
The comprehensive deal includes agreements with WCT, Perception Group, Perception TVCDN, and FORA, giving Trump Media global rights to utilize new CDN technology. Additionally, there is an option for Trump Media to potentially acquire Perception entirely in the future. The deal is valued at up to 5.1 million shares of DJT’s stock and $17.5 million over three years, with the closing dependent on the full setup of Perception’s software.
To finance its growth, Trump Media has secured an agreement with Yorkville Advisors to issue up to $2.5 billion in shares over three years at a 2.75% discount to the market price. This move is likely to result in increased dilution for investors in the near future.
Considering the current lack of analyst coverage on DJT stock, investors can assess the last three months of trading activity. During this timeframe, DJT shares have declined by 23.38% as controversies surrounding former President Trump, who is the largest shareholder of DJT, have influenced the stock’s performance. As a result, investing decisions regarding Truth Social may require careful consideration and monitoring of market trends.
In summary, Trump Media’s acquisition of WorldConnect Technologies’ assets will help it establish a CDN for streaming TV and expand its reach beyond Truth Social platform. However, investors should be aware of potential increased dilution due to issuing up to $2.5 billion in shares and carefully consider their investment decisions based on market trends and controversies surrounding former President Trump’s involvement in DJT stock performance