Trump Media shares continue to drop, as SEC move threatens to ding shareholders

By Bill Peters

Decline follows a steady move lower for the stock since Trump was found guilty last month in hush-money trial

Trump Media & Technology Group Corp. - the company behind former President Donald Trump's Truth Social platform - said Tuesday that regulators allowed some of its investors to resell certain securities and made certain warrants available for exercise.

After sliding about 10% during regular trading, shares of Trump Media & Technology (DJT) tumbled another 13.5% after hours on Tuesday, amid fears the moves would fatten the overall supply of shares, lowering their price for shareholders in the process.

The company on Tuesday said that the Securities and Exchange Commission had declared "effective" an amended registration statement for potentially millions of warrants and common shares, some of which would be issuable once the warrants are exercised. Warrants allow investors to buy or sell stocks at a pre-set price within a pre-set time period.

Trump Media & Technology said if all warrants in the registration statement were exercised for cash, the company could reap "up to an aggregate of approximately $247 million in proceeds."

Chief Executive Devin Nunes, a former Republican lawmaker from California, said the move helped set the stage to pursue Trump Media's streaming ambitions as well as "potential mergers and acquisitions."

The company said it would not receive any proceeds from the sale or resale of the securities, "except in connection with any possible future exercise for cash of any outstanding warrants." And it said company directors, officers and Trump himself - who owns around two-thirds of the company's outstanding stock - were still subject to a lockup period and were otherwise currently barred from selling shares.

Tuesday's share-price drop follows a steady move lower for the stock since Trump was found guilty last month of concealing a hush-money payment to a porn star.

Shares of Trump Media & Technology have seesawed, but are still up 78.9% so far this year, after a meme-stock-like run following its public debut in March. The company has called for investigations into possible illegal short-selling of its stock, although some experts have said those suspicions are unlikely to bear out.

Trump Media lost money during its first quarter.

-Bill Peters

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06-18-24 2018ET

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