WATERING DOWN DJT Stock: 21 Million Reasons Trump Media Shares Are Struggling to Stay Afloat.....
Trump Media filed to offer another 21 million shares, sending the stock down!
Trump Media & Technology (NASDAQ
JT) filed a 21 million-share secondary offering, which caused DJT stock to fall another 18%.
A secondary offering of stock has the effect of watering down the shares of existing shareholders. The company currently has 136.7 million shares outstanding.
DJT opened for trade this morning at $27 per share, a market capitalization of about $3.8 billion.
Investing Expert Says to Look for These 3 Factors in A.I. Stocks
An Old Story
Since the 19th century, corporations have sold new shares to reduce the value of a potential dissenter’s stake.
As Digital World Acquisition, a special purpose acquisition company (SPAC) that traded as DWAC, Trump Media has been actively traded for years. Other companies tied to the former president’s political movement, like Phunware (NASDAQ
HUN) and Rumble (NASDAQ:RUM), also had brief run-ups before falling. Trump Media rose sharply in its first days after de-SPACing last month but has since fallen steadily.
The most recent example of this “stock watering” came in 1956 from MinuteMaid, in which singer Bing Crosby then held a stake. (Minute Maid is now part of The Coca-Cola Co. (NYSE:KO)) Trump Media is tied to presidential candidate Donald Trump and has few assets beyond his name.
The secondary offering is just one part of the company’s most recent S-1 filing with the SEC. It notes that over 146 million additional shares could be sold once warrants are exercised. The warrants trade separately as Digital World Acquisition (NASDAQJTWW) and are currently worth $11.50 each. Trump also has 36 million shares given as an “earnout” bonus based on DJT’s stock price. Once his warrants are exercised, Trump could have a 65% share of the company’s stock.
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Trump Media filed to offer another 21 million shares, sending the stock down!
Trump Media & Technology (NASDAQ
JT) filed a 21 million-share secondary offering, which caused DJT stock to fall another 18%. A secondary offering of stock has the effect of watering down the shares of existing shareholders. The company currently has 136.7 million shares outstanding.
DJT opened for trade this morning at $27 per share, a market capitalization of about $3.8 billion.
Investing Expert Says to Look for These 3 Factors in A.I. Stocks
An Old Story
Since the 19th century, corporations have sold new shares to reduce the value of a potential dissenter’s stake.
As Digital World Acquisition, a special purpose acquisition company (SPAC) that traded as DWAC, Trump Media has been actively traded for years. Other companies tied to the former president’s political movement, like Phunware (NASDAQ
HUN) and Rumble (NASDAQ:RUM), also had brief run-ups before falling. Trump Media rose sharply in its first days after de-SPACing last month but has since fallen steadily. The most recent example of this “stock watering” came in 1956 from MinuteMaid, in which singer Bing Crosby then held a stake. (Minute Maid is now part of The Coca-Cola Co. (NYSE:KO)) Trump Media is tied to presidential candidate Donald Trump and has few assets beyond his name.
The secondary offering is just one part of the company’s most recent S-1 filing with the SEC. It notes that over 146 million additional shares could be sold once warrants are exercised. The warrants trade separately as Digital World Acquisition (NASDAQ
JTWW) and are currently worth $11.50 each. Trump also has 36 million shares given as an “earnout” bonus based on DJT’s stock price. Once his warrants are exercised, Trump could have a 65% share of the company’s stock. tic tic tic
