Trump Media gains SEC approval for resale of shares, eyes $247 million windfall
A screen shows Truth Social and Trump Media shares at Nasdaq.
The Trump Media & Technology Group stated on Tuesday (June 18) that the Securities and Exchange Commission (SEC) has approved its registration for the transfer of certain shares and warrants. This approval could provide the corporation with around $247 million in proceeds.
The company, which administers former US President Donald Trump's social media network Truth Social, says that now that its warrants are exercisable, it expects to be "well-positioned" to pursue developments in TV streaming and other platform enhancements. In addition, the funds could help with possible mergers and acquisitions.
Despite the possible cash boost, Trump Media's shares tumbled roughly 14 per cent in extended trading on fears about potential shareholder dilution. The proceeds from the sale of these warrants would be used to boost the company's present unrestricted cash reserves of more than $200 million.
Trump Media also stated that an additional $40 million of restricted cash on its balance sheet will become unrestricted once the Form S-1 registration statement is effective. According to LSEG data, the company's shares have fallen 46 per cent since its backdoor offering on the Nasdaq in March, with a market value of $5.53 billion.
(With inputs from Agencies)