Trump Media & Technology Group (TMTG) recently announced a new public stock offering of 21.5 million shares, causing existing shareholders, including former President Donald Trump, to see a substantial devaluation of their stakes. The struggling company has been rapidly losing money and this new stock offering is seen as a way to potentially stay afloat. Despite the negative impact on existing shareholders, experts believe that management would be wise to issue new stock in order to generate much-needed funds.
Following the announcement of the new stock offering, TMTG’s stock fell more than 15% on Monday. The company had experienced a surge in its stock value in anticipation of merging with a blank-check acquisition company but has since lost over 60% of its value from its peak on March 26. Shareholders, including Trump, have already seen significant declines in the value of their holdings since the company went public. Trump’s net worth has also taken a hit as a result of these stock price fluctuations.
The association of the company with Trump, a polarizing political figure, has contributed to the volatility of its stock price. Experts have cautioned retail investors to be cautious when trading TMTG stock, as the company lacks the fundamentals to support its high valuation. With Trump currently owning over 57% of the company’s shares, the new public offering could potentially reduce his ownership to just under half of the company’s publicly traded stock, unless he chooses to purchase additional shares.
Despite the challenges facing the company, including substantial financial losses and a decline in user numbers, TMTG is in need of additional funds to sustain its operations. The company has expressed doubts about its ability to continue operating and has highlighted the potential risk posed by Trump’s ongoing legal proceedings. A negative outcome in these legal proceedings could have a detrimental effect on TMTG’s reputation and brand, as well as on its business operations. The company also noted that if Trump is unable to devote substantial time to Truth Social, TMTG’s business could be adversely affected.
While the recent stock offering has resulted in a temporary decline in TMTG’s stock price and upset existing shareholders, some investors may view this as an opportunity to buy the dip and capitalize on potential future gains. As long as Trump remains in the news and continues to be a prominent figure associated with the company, TMTG is likely to remain a topic of interest and speculation among investors. This is a developing story that will continue to be updated as new developments unfold in relation to TMTG’s financial situation and Trump’s legal affairs.
