Yesterday, shares of Trump Media & Technology Group (NASDAQ:DJT) stock closed higher by about 30% following the failed assassination attempt of Donald Trump over the weekend. That created an ideal backdrop for the company to announce the resale and registration of 37.96 million shares. This news has sent DJT stock into the red by about 9%.
The resale consists of 37.64 million shares from investment firm Yorkville, 200,000 shares issued to Yorkville and 125,000 shares issuable to EF Hutton. The two firms will receive these shares within one day of the resale filing.
As of July 3, 189.94 million shares were outstanding.”Thus we are registering the maximum amount that we could register without obtaining approval of stockholders in accordance with Nasdaq’s ‘minimum price rule,'” said TMTG. The registered shares equate to about 20% of the outstanding shares.
DJT Stock: Trump Media Files for Resale of 37.96 Million Shares
Yorkville is set to receive 200,000 shares of DJT stock as consideration for entering into a standby equity purchase agreement (SEPA) with TMTG on July 3. The SEPA will see Yorkville purchase up to $2.5 billion of DJT. EF will receive 125,000 shares for its role as the exclusive placement agent of the SEPA.
“The per share subscription price Yorkville will pay for the shares will be 97.25% of the Market Price during a one- or three-day pricing period elected by the Company,” said TMTG.
Yorkville is offering a maximum of 37.84 million shares as part of the resale, while EF is offering up to 125,000. After the completion of the offering, Yorkville will own zero shares, while EF will own 86,719 shares.
TMTG won’t benefit from Yorkville’s sales, although it could receive up to $2.5 billion from the firm in connection with the SEPA. These proceeds will be used toward working capital and general corporate purposes.
As a new company, TMTG needs funding in order to survive and grow, and that’s exactly what it’s doing. TMTG barely makes any money from its core business, reporting first-quarter revenue of just $770,500 amid a massive net loss of $327.6 million. However, DJT has enjoyed generous gains this year due to its connection with Trump.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
