On Tuesday, Trump Media & Technology Group (DJT) experienced a 4% drop in its shares after revealing that it had raised over $105 million through the exercise of warrants for cash. The fundraising effort began over 12 days ago, starting on June 20, right after the SEC approved the registration of new shares. This approval allowed for the issuance of millions of new Trump Media shares through warrants, which allow holders to purchase shares at a set price. While this method of fundraising generates a significant amount of cash — potentially up to $247 million if all warrants are exercised — it also poses a risk of diluting the value of the stock by increasing the number of shares available.
In recent disclosures, Trump Media shared that an additional $41 million of restricted cash had been converted into unrestricted cash. With no debt on its balance sheet, the company now has over $350 million in cash. Despite these positive developments, the stock had experienced a prolonged sell-off after former President Trump, who owns approximately 65% of the company’s shares, was found guilty on 34 counts of falsifying business records in New York. Although the stock did partially recover from the decline, there was another sharp drop in shares following Trump’s first debate with President Joe Biden.
On Monday, Trump Media made an announcement that it had been included in the Russell 1000 and Russell 3000 indexes, affecting its market performance. As of the most recent check on Wednesday, DJT shares were trading lower by 2.80% at $30.84 premarket. This market news and data is provided by Benzinga APIs and Benzinga does not offer investment advice. All rights are reserved by Benzinga.