Last week, TMTG, the operator of the Truth Social platform (DJT), announced that it expects to receive over $69.4 million from the cash exercise of warrants on June 20 and 21, 2024. The company’s stock price has increased as a result of this news. If all warrants covered by the registration statement are exercised for cash, the company could receive up to approximately $247 million. Additionally, $40 million of restricted cash will become unrestricted due to the effectiveness of the registration statement. These funds will be added to the over $200 million in unrestricted cash already held by TMTG as of June 18, 2024.
Despite recent market value declines, experts caution that TMTG remains overvalued. Truth Social is gaining popularity but is still considered a minor player in the social media landscape compared to platforms like Elon Musk’s X, Reddit Inc and Meta Platforms Inc Instagram Threads. Some experts draw comparisons to meme stocks like GameStop Corp and AMC Entertainment Holdings which trade on momentum rather than fundamentals.
Former President Donald Trump, who holds an 114.75 million shares in the company and is its dominant shareholder, has seen his stake value drop from $6 billion to about $3.1 billion since late May. The company intends to use these funds for enhancing its ad platform and exploring potential mergers and acquisitions. Over the past year, TMTG stock has gained an impressive 118% and is currently trading higher by 7.12% at $29.63 premarket on Monday
