Shares of Donald Trump's media company Trump Media & Technology Group Corp DJT are falling Thursday with the company's recent share offering filing approved.
Here's a look at what this could mean for Trump's stake in the company.
What Happened: Trump Media & Technology Group shared on Tuesday after market close that the SEC declared its registration statement for the resale of shares and warrants effective.
The filing, which was originally issued June 10, calls for the company to issue up to 14.4 million common shares from the exercising of warrants and for the sale of up to 146.1 million shares.
Included in the filing are the listed sellers of Trump Media & Technology shares, which includes ARC Global Investment, who owns 13.1 million shares and 7.3% of the company.
The filing also includes the registration of 114,750,000 shares held by Trump. This total includes 78,750,000 shares received at the time of the company going public and 36,000,000 earnout shares that were earned based on the performance of the stock.
Based on the price of Trump Media & Technology shares at the time of writing, Trump's stake is worth $3.2 billion. The filing shows Trump owning 64.9% of the company's common stock.
Related Link: Trump’s Stock Loss Means Millions For Short Sellers: ‘A Lot Of His Businesses Go Belly Up, Quickly’
Why It's Important: The filing represents 393% of the company's current public float and 82.6% of the outstanding shares of the company.
The sale of the shares could lead to a declining stock price for Trump Media & Technology with the float increasing.
Trump is now free to sell his entire stake of common stock in the company. The former president will maintain control over the company thanks to a special voting class of shares. Trump is the only holder of the other class of stock that was created. He maintains 55% voting power of the company if he holds one of the higher class shares.
Trump Media & Technology Group shares opened for trading at $70.90 on March 26 when its long-awaited SPAC merger with Digital World Acquisition was completed.
While the company had a market capitalization of $8 billion and Trump's net worth soared to $6.4 billion, the stock quickly fell after the public debut and has fallen in recent weeks after Trump was found guilty of 34 counts of falsifying business records.
Trump faces a $355 million fine from a previous ruling in a New York court, and has spent hundreds of millions on legal fees related to several court cases.
Along with the legal fees and fines, Trump is in a highly competitive 2024 election race against Joe Biden that could see the need to raise more capital.
Trump and other executives were subject to a six-month lockup previously, but the filing appears to waive that restriction with other metrics like the share price met. The SEC deemed the registration effective, which means investors will now be closely following upcoming filings from the company to see if and when Trump cashed out of his namesake media company.
DJT Price Action: Trump Media & Technology shares are down 13.8% to $26.98 at the time of publication Thursday, versus a 52-week trading range of $12.40 to $79.38.
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
