by Trump Media & Technology Group Corp. The company that runs former President Donald Trump’s Truth Social platform said Tuesday that regulators had allowed some investors to resell certain securities and exercised certain warrants. Trump Media & Technology DJT shares fell another 13.5% in after-hours trading Tuesday after dropping 9.82% after falling about 10% during regular trading on concerns that the action would reduce the overall supply of shares, thereby lowering the stock price for shareholders.
The company said Tuesday that the Securities and Exchange Commission had declared an amended registration statement “effective” for potentially millions of warrants and common stock, some of which could be issuable if the warrants are exercised. The warrants allow investors to buy and sell shares at a predetermined price within a prescribed period. Trump Media & Technology said the company could earn “up to approximately $247 million in aggregate proceeds” if all of the warrants listed in the registration statement are exercised for cash.
Chief Executive Officer Devin Nunes, a former Republican congressman from California, said the move helped prepare Trump Media for its streaming ambitions and “potential mergers and acquisitions.” The company said it would not receive any proceeds from the sale or resale of securities “except in connection with the potential future exercise of all outstanding cash warrants.” It also said the company’s directors and senior executives, as well as Trump himself, who owns about two-thirds of the company’s outstanding stock, are still subject to lockup periods at this time and are otherwise prohibited from selling shares.
Tuesday’s drop comes after the stock has been on a steady downward trend since President Trump was convicted last month for concealing hush payments to porn stars. Trump Media & Technology shares have soared, but are still up 78.9% year to date since the company’s meme-like surge following its IPO in March. The company is seeking an investigation into possible illegal short selling of its own stock, but some experts say those allegations are unlikely to be confirmed. Trump Media lost money in the first quarter.
