Trump Media Stock Plummets After Filing To Issue Millions of New Shares

Photo illustration of Donald Trump and Truth Social in app store

Dylan Zurawell / Investopedia

Key Takeaways

  • Trump Media & Technology Group stock sank in intraday trading Monday after the company filed to issue millions of new shares.
  • The Truth Social operator could offer about 21.5 million new shares, according to an S-1 filing with the Securities and Exchange Commission.
  • The stock has dropped well below the levels it debuted at following the merger of Trump Media and Digital World Acquisition Corp. last month.

Shares of Trump Media & Technology Group (DJT), former President Donald Trump's media company and the parent of Truth Social, plummeted in intraday trading Monday as it reported in a Securities and Exchange Commission (SEC) filing that it plans to issue millions of additional shares.

Trump Media could offer up to about 21.5 million shares that are issuable upon the exercise of a number of different warrants, the company said in an S-1 filing.

The company also registered to resell more than 146 million shares, about 115 million of which belong to Trump, who is one of several shareholders who cannot sell shares until after a predetermined lock-up period passes.

Trump Media projected that it would receive about $247.1 million if those who hold public warrants exercise them and sell shares, and the company expects they will if the stock's price stays above $11.50. Trump Media shares were down 17% to $26.90 around 1:50 p.m. ET Monday.

Shares of Trump Media have been on a rollercoaster since their public debut last month following a merger with Digital World Acquisition Corp., which was first announced in October 2021 and finally completed last month after SEC investigations delayed the merger.

The stock rose 16% in its first day of trading under the "DJT" ticker, which stands for the former president's initials, but has been on the decline since the company reported earlier this month that it incurred a $58.2 million loss in fiscal 2023. The Truth Social operator said it expected to continue to "incur operating losses and negative cash flows from operating activities for the foreseeable future, as it works to expand its user base, attracting more platform partners and advertisers."

Trump Media shares last week fell below the levels that DWAC stock was at in the weeks leading up to the merger.

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  1. Securities and Exchange Commission. "FORM S-1."

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