This is not investment advice. The author has no investments in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.
Trump Media & Technology Group (NASDAQ: DJT), parent company of Truth Social Platform, expects to receive a significant amount of proceeds from the cash exercise of warrants, significantly enhancing its liquidity, as well as freeing up another portion of restricted cash on its balance sheet.
On June 18, the SEC declared Trump Media & Technology Group’s amended Form S-1 effective, clearing the way for the company to register up to 14,375,000 common shares issuable upon exercise of up to 4,061,000 warrants.
The filing also permits Trump Media & Technology Group insiders to sell up to 146,108,000 shares of common stock following the expiration of the lock-up period, which is the earlier of September 25, 2024 or the date the stock price reaches or exceeds $12 per share for 20 out of 30 business days beginning on August 22, 2024.
Today, Trump Media and Technology Group announced in their latest press release that they expect to realize $69.4 million in proceeds from the cash exercise of their warrants. For those who don’t know, these warrants have an exercise price of $11.50 per share. As long as the stock price remains above this exercise price, it makes economic sense for investors to exercise their warrants and acquire the underlying common stock.
Additionally, $40 million of restricted cash that was recorded on Trump Media and Technology Group’s balance sheet became unrestricted following the SEC’s declaration of effectiveness of the company’s amended Form S-1, an action that increased Trump Media’s total unrestricted cash to $240 million.
As the company’s press release states:
“The Company intends to use the net proceeds from the exercise of the warrants to implement its business plan, including working capital, potential acquisitions and other general corporate purposes.”
Trump Media CEO Devin Nunes said separately:
“With the S-1 declared effective, we expect we will be well positioned to aggressively pursue television streaming, other enhancements to our platform and potential mergers and acquisitions. With our approximately 620,000 individual shareholders supporting our vision, we look forward to rapid and strong growth.”
