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Key takeaways
Shares of Trump Media fell Thursday after a Securities and Exchange Commission (SEC) ruling cleared the way for more of its shares to be sold.
App owner Truth Social announced that the SEC declared Trump Media’s registration statement effective after the bell Tuesday, opening the door for several investors to exercise warrants.
The SEC’s action could mean that more than 14 million new shares of Trump Media could hit the market if investors sell through the warrants.
Trump Media CEO Devin Nunes said the SEC filing was “another important step” for the company and said he believes it is well-positioned for growth.
Trump Media and Technology Group (DJT) or TMTG shares fell more than 14% on Thursday after the Securities and Exchange Commission (SEC) said the company’s registration statement effective, which could flood the market with millions more shares of Trump Media.
Former President Donald Trump’s media company announced the development after the bell Tuesday, and the stock then fell in extended trading as the SEC’s decision means more than 14 million shares could hit the market. market if a certain number of investors operate. mandates and dispose of their shares, as stated in the company’s prospectus. The markets being closed on Wednesday for Juneteenth celebrationThursday was the first full day of trading following the announcement.
Warrants exercised could bring TMTG nearly $250 million
The company said in a Tuesday release that all warrants exercised for cash could generate up to $247 million in proceeds, plus an additional $40 million that is no longer subject to any restrictions following the declaration. entry into force of the registration declaration.
CEO Devin Nunes called the announcement “another milestone” for TMTG and Truth Social, the social media platform operated by TMTG, and said the company expects to be “well positioned” to address new areas of growth such as the expansion of Truth Social and the pursuit of streaming television. product.
Trump Media shares have seen significant volatility since its merger with Digital World Acquisition Corp. became a public company in March.
Thursday’s losses add to recent volatility
A number of recent events have caused substantial fluctuations in the company’s stock, since the company’s move inform Nasdaq executives he believed that there was “naked short selling“from its stock to the declarations of intentions of issue millions of new shares And earnings reports that revealed substantial losses.
The stock has fallen in all but two trading sessions since Trump was convicted of 34 counts of falsifying business records in a New York court on May 31.
Shares of Trump Media fell 14.6% to close at $26.75 on Thursday, their lowest point in more than two months.
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