Trump Media shares plunge 17% as more DJT shares dilute performance

The SEC’s statement authorizes early investors in Trump Media to exercise public warrants they hold in the company, whose majority shareholder is former President Donald Trump.

In a prospectus filed with the U.S. Securities and Exchange Commission (SEC) on Tuesday, Trump Media said that if these warrants are exercised, up to 14,375,000 additional shares could be issued.

The company noted that if warrant holders sell their shares or it “appears that such sales may occur,” there could be a “significant decline in the public trading price” of the stock.

However, Trump Media stated that existing shareholders who sold at a lower price after registration “could still receive a positive return on the shares due to the lower price per share” when they purchased them.

The prospectus also states: “If all of the warrants referred to in the registration statement are exercised for cash, (Trump Media) may receive aggregate proceeds of up to approximately $247 million.”

“In addition, $40 million of restricted cash on the Company’s balance sheet will no longer be restricted upon the effective date of the registration statement,” the prospectus states. “These funds would be in addition to the more than $200 million of unrestricted cash that the Company currently has.”

Devin Nunes, CEO of Trump Media, said in a statement: “Today marks another milestone for Truth Social.”

“With the enactment of our S-1, we expect to be well positioned to aggressively pursue TV streaming, other platform enhancements, and potential mergers and acquisitions,” Nunes said.

“With our vision supported by around 620,000 private shareholders, the company looks forward to rapid and robust expansion.”