Shares of Trump Media, the company behind former President Donald Trump’s social media app Truth Social, have plummeted by over 13% on Monday. This dramatic decline follows the company’s filing to issue millions of additional shares of stock.
**Trump’s Court Appearance Concurrently with Stock Drop**
The stock’s slide occurred while Donald Trump was appearing in a Manhattan court for jury selection in his criminal trial related to hush money payments. As the majority shareholder in Trump Media, this trial could have implications for the company’s future.
**Company Plans to Issue More Stock**
Trump Media, trading under the ticker symbol DJT on the Nasdaq, disclosed its intention to issue more common stock in a preliminary prospectus filed with the Securities and Exchange Commission (SEC). The shares cannot be issued until a registration statement with the SEC becomes effective.
The filing outlines a plan to offer over 21.4 million shares of common stock, which will be issued upon the exercise of warrants. Stock warrants give holders the right to purchase shares at a predetermined price within a specified time frame.
**Financial Implications of Stock Issuance**
Trump Media estimates that it could receive up to 7.1 million from the exercise of the warrants. However, the company also plans to offer the resale of up to 146.1 million shares of stock from selling security holders, including 114.8 million held by Donald Trump himself.
If the stock price remains above a certain level for a specified number of trading days, Trump could earn an additional 36 million “earnout shares,” worth over .2 billion as of Monday morning.
**Trump’s Efforts to Revive Social Media Influence**
Trump’s social media following has declined significantly since he was banned from Twitter and Facebook in 2021. The former president has since encouraged his followers to join Truth Social, but it is unclear how many have taken up his call.
Trump Media has not publicly disclosed key performance indicators, such as the number of active Truth Social users. This lack of transparency adds to the uncertainty surrounding the company’s future.
**Breaking News Updates**
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