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 on June 18, 2024.
TMTG revealed that if all warrants covered by the registration statement are exercised for cash, the company could receive up to approximately $247 million.
In addition, the company will receive $40 million in escrow cash unrestricted due to the effectiveness of the registration statement. These funds are in addition to the more than $200 million in unrestricted cash that TMTG already held as of June 18, 2024.
The infusion of funds will likely support the further development and expansion of its platforms, including Truth Social.
TMTG has experienced a significant decline in market value. The conservative social media company’s shares have fallen nearly 50% since May 30, following the conviction of former President Donald Trump on 34 felonies in a hush-money trial, CNN reports.
Despite the falling share price, experts warn that TMTG remains overvalued. Truth Social is a small player in social media compared to platforms like Elon Musk’s X. Reddit Inc (NYSE:RDDT), and Metaplatforms Inc (NASDAQ:META) Instagram threads.
Some experts compare TMTG to meme stocks such as GameStop Corp (NYSE:GME) and AMC Entertainment Holdings, Inc (NYSE:AMC), which trade based on momentum rather than fundamentals.
Trump, the dominant shareholder with 114.75 million shares, has seen the value of his stake fall from $6 billion to about $3.1 billion since the end of May. The company plans to use the money raised to improve its advertising platform and explore potential mergers and acquisitions.
TMTG shares are up 118% in the past twelve months.
Price promotion: DJT shares are trading 7.12% higher at $29.63 premarket at last check on Monday.
Disclaimer: This content was produced in part using AI tools and was reviewed and published by Benzinga’s editorial staff.
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This article What’s going on with Trump Media & Technology stock on Monday? originally appeared on Benzinga.com
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