Trump Media & Technology Group (NASDAQ: DJT) The stock rises on Monday. The social media company’s stock price was up 20.4% as of 12:15 p.m. ET, according to data from S&P Global Market Intelligence.
After a brutal period of sell-off, shares of Trump Media are gaining ground today following recent comments from the company saying it will gain a major new source of funding through the exercise of stock warrants. The share may also gain ground in combination with developments in one of the lawsuits against the former president and the current presidential candidate.
Trump Media gets a cash injection
On Friday, Trump Media issued a press release saying it expected to receive more than $69.4 million in cash proceeds from stock warrants exercised on June 20 and 21. If all warrants covered by the registration statement approved by the Securities and Exchange Commission (SEC) are executed on June 18, the company says it could generate a total of $247 million in proceeds.
Although the company says it is focused on building and expanding the reach of its platforms based on near-term revenue, the company posted revenue of just $770,500 in the first quarter. Meanwhile, Trump Media posted a net loss of about $327.6 million in the quarter and ended the period with cash and equivalents totaling $273.7 million.
With the company currently posting significant losses and little revenue, the confirmation of new capital injections is welcome news for shareholders. But even with today’s big numbers, the stock is still down about 21.5% over the past month.
Legal developments could also boost Trump Media’s stock
A federal judge will hear arguments today on whether former President Donald Trump should be restricted from making comments about FBI agents and issues related to a 2022 search for classified documents at his Mar-a-Lago estate was carried out.
The former president’s team claims that any restrictions on this issue would violate his First Amendment rights and impose unreasonable restrictions on his presidential campaign. A potential ban order could also have a significant impact on Trump Media’s stock. Trump Media’s core business revolves around the Truth Social platform. The service is used as a social media soapbox for the former president.
If Donald Trump is barred from saying certain things, it could limit the appeal of Truth Social and the company’s other platforms. Accordingly, some investors may see signals that the former president is unlikely to be unable to make any pronouncements and will be interpreted as a bullish sign.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Trump Media & Technology Group Shares Are Rising Today was originally published by The Motley Fool
