Trump Media & Technology Group Corp. (NASDAQ:DJT), the operator of the Truth Social platform, is trading higher on Monday. Last week, the company announced that it expects to receive more than $69.4 million from the cash exercise of warrants on June 20 and 21, 2024.
The cash exercise option became available after the Securities and Exchange Commission (SEC) declared the company’s registration statement effective June 18, 2024,
TMTG revealed that if all of the warrants covered by the registration statement were exercised for cash, the company could receive up to approximately $247 million.
Additionally, the company will have $40 million of restricted cash that will no longer be restricted due to the effectiveness of the registration statement. These funds are in addition to the more than $200 million in unrestricted cash already held by TMTG as of June 18, 2024.
The cash infusion will likely support the development and expansion of its platforms, including Truth Social.
TMTG experienced a significant decline in its market value. Shares of the conservative social media company have fallen nearly 50% since May 30, following former President Donald Trump’s conviction on 34 counts in a secret trial, according to CNN. reports.
Despite the share price falling, experts warn that TMTG remains overvalued. Truth Social is a minor player in social media compared to platforms like Elon Musk’s X, Reddit Inc. (NYSE:RDDT), And Meta Platforms Inc (NASDAQ:META) Instagram feed.
Some experts compare TMTG to meme stocks like GameStop Corp. (NYSE:GME) And AMC Entertainment Holdings, Inc. (NYSE:AMC), which trade on momentum rather than fundamentals.
Asset, the dominant shareholder with 114.75 million shares, has seen the value of its stake fall from $6 billion to around $3.1 billion since the end of May. The company plans to use the funds raised to improve its advertising platform and explore possible mergers and acquisitions.
TMTG stock has gained 118% over the past 12 months.
Price action: DJT shares are trading up 7.12% at $29.63 premarket at last check Monday.
Disclaimer: This content was partially produced using AI tools and was reviewed and published by Benzinga editors.
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