Trump Media & Technology Group stock climbed as much as 25% on Monday afternoon, erasing some of the stock’s recent losses as it prepares to pocket millions of dollars from the exercise of warrants.
Shares of Trump Media, the company behind former President Donald Trump’s social media site Truth Social, traded at about $34 to start the week. The company’s stock has sunk almost 35% since Trump was convicted on 34 felony counts in his New York hush money trial.
Trump Media said Friday that it expects to receive more than $69.4 million in proceeds from the cash exercise of warrants on June 20 and 21. If all the warrants covered by the registration statement are exercised for cash, Trump Media could eventually receive as much as $247 million, the company said.
Trump Media said in an April Securities and Exchange Commission filing that it was registering the resale of up to almost 21.5 million new shares of common stock issuable upon the exercise of warrants, up to about 146 million shares of common stock, and up to about 4 million warrants to purchase common stock.
Earlier this month, Trump Media filed a new registration statement with the SEC that included a re-audit of the company’s financial statements spanning from Dec. 31, 2023, and Dec. 31, 2022. The re-audited filings confirmed that Trump Media lost $58 million last year.
Trump Media revealed in April that it “lacks the financial resources it needs to sustain operations for a reasonable period of time,” raising “substantial doubt” as to its ability to continue operations. The company also said in an SEC filing that it expects to continue incurring operating losses and negative cash flow “for the foreseeable future.”
The exercise of warrants and registration of additional shares are popular ways for public companies to receive a cash infusion, but these actions also dilute stockholders by increasing the number of shares freely tradable.
The former president is a majority shareholder of Trump Media, holding almost 65% of outstanding common stock in the company as of June 10.