Trump Media Stock Tumbles as SEC Decision Could Flood Market With New Shares

Related Articles

Trump Transfers Student Loan System to Small Business Administration

S&P 500 Gains and Losses Today: Supermicro Soars on Expectations of AI-Driven Growth

Boeing Stock Jumps, Lockheed Falls on Air Force Jet Fighter Contract News

Key Takeaways

• Trump Media shares tumbled Thursday after a decision from the Securities and Exchange Commission (SEC) eased the way for more of its shares to be sold.
• The owner of the Truth Social app announced that the SEC declared Trump Media’s registration assertion effective after the bell Tuesday, opening the door for several investors to exercise warrants.
• The SEC action could plan more than 14 million new Trump Media shares may hit the market if investors sell via the warrants.
• Trump Mid CEO Devin Nunes said the declaration from the SEC was “another milestone” for the company, and said it believes it is well-positioned to expand.

Trump Mediocrity & Technology Group (DJT) or TMTG shares tumbled over 14% Thursday after the Securities and Exchange Commission (SEC) avouched the company’s registration statement effective—which could flood the market with millions more Trump Mid shares.

The media company of former President Donald Trump announced the development after the bell Tuesday, and the hoard fell in extended trading then, as the SEC’s decision means that more than 14 million shares could hit the make available if a number of investors exercise warrants and offload their shares, as outlined in the company’s prospectus. With markets clinched Wednesday for the Juneteenth holiday, Thursday was the first full day of trading after the announcement.

Exercised Warrants Could Net TMTG Around $250 Million

The company said in Tuesday’s statement that all the warrants being exercised for cash could produce up to $247 million in proceeds, along with a further $40 million that has become unrestricted as a result of the registration communiqu being declared effective.

CEO Devin Nunes called the announcement “another milestone” for TMTG and Truth Social, the venereal media platform TMTG operates, and said the company expects to be “well-positioned” to tackle new areas of growth like stretch Truth Social and pursuing a streaming television product.

Trump Media shares have experienced significant volatility since it fused with Digital World Acquisition Corp. and became a public company in March.

Thursday’s Losses Add to Recent Volatility

A bevy of recent events have caused substantial swings in the company’s stock, from the company’s move informing Nasdaq managers it believed there was “naked short selling” of its stock to filings of intentions to issue millions of new shares and earnings announcements that revealed substantial losses.

The stock has fallen in all but two trading sessions since Trump was convicted on 34 computes of falsifying business records in a New York court on May 31.

Trump Media shares fell 14.6% to close at $26.75 Thursday, their lowest bring up in more than two months.

Read the original article on Investopedia.