Shares of Trump Media dipped at the opening bell Tuesday after the company, whose majority owner is President Trump, announced it collected more than $105 million through the cash exercise of warrants.
This influx of cash occurred over a 12-day period starting June 20, two days after the Securities and Exchange Commission declared effective the company's registration of new shares.
The SEC's declaration allowed the issuance of millions of shares of Trump Media stock upon the exercise of warrants, enabling holders to buy shares at a set price within a specific timeframe. While this maneuver raises funds — potentially netting about $247 million if all warrants are exercised — it also risks diluting the stock price by increasing the number of shares available.
Additionally, Trump Media revealed that around $41 million of restricted cash has recently become unrestricted. The company, trading on Nasdaq under the ticker DJT, reported having more than $350 million in cash and no debt. Much of this capital was secured before completing a merger in late March with Digital World Acquisition Corp., a blank-check company, allowing Trump Media to trade publicly without an initial public offering.
Since its public debut, Trump Media's stock has experienced significant volatility, with dramatic spikes followed by declines and recoveries. Despite its limited revenue, the company has a multibillion-dollar market capitalization and has been characterized as a meme stock.
On Monday, Trump Media announced it was selected to join the Russell 1000 and Russell 3000 indexes.
