Trump Media & Technology Group plunged again Thursday after regulators approved its registration statement, clearing the way for investors to exercise warrants and for the company to issue extra shares, making millions more available for trading.
Warrants, which reward investors by letting them swap their holdings for shares in the company, can dilute the value of the shares held by ordinary shareholders. Typically some of the investors who exercise warrants will sell the shares, putting pressure on the stock.
The social media company behind Trump’s go-to social media platform Truth Social plummeted 15% to close at $26.75 in trading Thursday, flirting with its all-time low of $22.55.
Donald Trump loses billions as DJT stock tanks
The former president and Republican nominee has lost billions in paper wealth since the beginning of June. As Trump Media’s largest shareholder, he has nearly 115 million shares worth about $3 billion, down from more than $5 billion. Trump and other insiders are restricted from selling stock until September unless the board waives that restriction or moves up the lock-up period.
The stock’s long slide began following the former president’s guilty verdict on all 34 felony counts in his criminal hush money trial. Trump Media, which trades under the vanity ticker “DJT,” has tanked 48% since May 30 when a New York jury found Trump guilty of falsifying business records.
DJT CEO pumps up Trump Media stock
Trump Media hailed the news that its registration statement was declared effective. The warrants could add up to $247 million to the Trump Media balance sheet.
“We’re expecting to be well positioned to energetically pursue TV streaming, other enhancements to the platform, and potential mergers and acquisitions,” Trump Media Chief Executive Officer Devin Nunes said in a statement.
