Why Trump Media & Technology Group Stock Is Crashing Tuesday

Trump Media & Technology Group Corp. DJT shares are trading lower Tuesday after the U.S. SEC declared effectiveness of the registration statement on Form S-1 related to the resale by certain securityholders of certain shares and warrants.

The Details: Trump Media & Technology Group filed the prospectus on June 10 for the issuance of up to 14.4 million common shares upon the warrant exercise and resale of 146.1 million shares by selling stockholders, including 78.8 million shares held by Donald Trump. 

The registration statement, now effective, allows the covered selling securityholders to publicly resell the securities. Additionally, Trump Media & Technology Group’s warrants covered by the registration statement have become eligible for cash exercise. 

If all warrants covered by the registration statement are exercised for cash, Trump Media & Technology Group may receive up to an aggregate of approximately $247 million in proceeds. Additionally, $40 million of restricted cash on the company’s balance sheet will become unrestricted as a result of the registration statement becoming effective. 

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“Today marks another milestone for Truth Social,” said TMTG CEO Devin Nunes. “With our S-1 declared effective, we’re expecting to be well-positioned to energetically pursue TV streaming, other enhancements to the platform, and potential mergers and acquisitions. With approximately 620,000 retail shareholders supporting our vision, the company looks forward to expanding quickly and robustly.”

Trump Media & Technology Group shares fell 9.82% during Tuesday's regular session to close at $31.31 and are dropping further after-hours on the news. 

DJT Price Action: According to Benzinga Pro, Trump Media & Technology Group shares are down 13.93% after-hours at $26.95 at the time of publication Tuesday.

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