On Monday, April 15th, Trump Media&Technology Group (TMTG, stock code DJT) fell 18.35% to close at $26.61 per share.
Compared to the opening price of $70.90 per share on the first day of SPAC's listing, TMTG has fallen by over 62%; Compared to the closing price of $49.95 on the day before listing, it has fallen nearly 47%. At present, the total market value of the company is about 3.6 billion US dollars, far below the nearly 6 billion US dollars touched last month.
On the news front, TMTG disclosed its plan to issue additional common shares in a document submitted to the US Securities and Exchange Commission (SEC). The document shows that the company plans to apply for the issuance of 21491251 shares (approximately 21.5 million shares) and 4061251 warrants.
In addition, the company mentioned that existing shareholders may resell up to 146108680 shares (over 146 million shares) of common stock in the future, of which 114750000 shares (approximately 115 million shares) are from former US President Donald Trump. It is understood that Trump owns approximately 78.8 million shares of TMTG common stock in the company.
According to the document, if the trading volume weighted average price (VWAP) of ordinary shares exceeds $17.50 for 20 out of 30 consecutive trading days within three years, Trump will acquire 36 million "Earout" shares, which will increase Trump's stock count from 78.8 million to around 115 million.
Peter Byrne, a securities lawyer specializing in corporate mergers at law firm Cooley LLP, stated that these treaties are "fully compliant with the standards.". Bankers and lawyers also told the media that the document did not indicate an urgent intention to sell, but it did clear the way for Trump to sell shares after the lockdown period expired.
In October 2021, Trump founded Trump Media Technology Group TMTG and launched "Real Social" in early 2022, attempting to compete with social media giants. However, according to data from research institutions, "Real Social" had approximately 5 million active users in February this year, which is far from mainstream social media platforms in the United States.
The documents at the beginning of the month also showed that the company's revenue for 2023 was only $4.1 million, while the net loss reached $58.2 million. Verity Research Director Ben Silverman stated that the valuation of TMTG's stock is clearly disconnected from its financial condition.
Analysis suggests that the overestimation of TMTG is largely due to Trump's "celebrity effect", and investing in TMTG is more like a political statement. This allows supporters of Trump to drive up stock prices, but also attracts short sellers.
In addition, Trump's potential selling and cashing out could also lead to a significant drop in stock prices. During the day, Trump's "sealing fee" case was heard at the Manhattan Criminal Court and jury members were selected. According to American media, the trial will take place four days a week and may last for eight weeks.