Trump Media announces $105 million raised from DJT warrants

Shares of Trump Media closed 4% lower Tuesday after the company, whose majority owner is former President Donald Trump, said it collected more than $105 million through the cash exercise of warrants.

The proceeds came during a 12-day stretch starting June 20, two days after the company behind the social media platform Truth Social announced that its registration of new shares was declared effective by the Securities and Exchange Commission.

That declaration permitted the issuance of millions of shares of Trump Media stock upon the exercise of warrants, which allow their holders to buy shares at a set price within a specified timeframe.

While the maneuver brings in money — Trump Media says it will net about $247 million in proceeds if all warrants are exercised for cash — it also threatens to dilute the company’s stock price by swelling the float.

In addition to the proceeds from the exercise of the warrants, Trump Media said in a press release Tuesday that about $41 million of restricted cash “has recently become unrestricted.”

The company — which trades on the Nasdaq using Trump’s initials, DJT, as its ticker — said it has more than $350 million in cash and no debt on its balance sheet.

Much of that money came before the company completed a merger in late March with the blank-check company Digital World Acquisition Corp., which allowed Trump Media to trade publicly without going through an initial public offering.

Since its public debut, Trump Media’s stock price has swung dramatically up and down, with massive spikes prefacing weeks of declines and recoveries. The company has a multibillion-dollar market capitalization despite its paltry revenue and has been tarred as a meme stock.

The stock suffered a weekslong sell-off after Trump, who owns about 65% of the company’s shares, was found guilty of 34 counts of falsifying business records in his criminal hush money trial in New York.

It has partially recovered from that slide, though shares dropped sharply after whipsawing on the day after Trump’s first debate with President Joe Biden.

On Monday, Trump Media said it was selected to join the Russell 1000 and Russell 3000 indexes.

This is developing news. Please check back for updates.