After the media firm announced that it had finalized an agreement to generate over $2.3 billion through the sale of new common shares and convertible debt, which it will use to establish a bitcoin treasury reserve, shares of Trump Media & Technology Group Corp. increased on Friday.
Despite the decline in the price of bitcoin (BTCUSD) and the SPX, the news helped drive the stock (DJT) up 2.1% in afternoon trading.
According to Trump Media, it sold $1 billion in debt that could be converted to stock at a price of $34.72 and 55.86 million common shares for $25.72. The business stated that it will establish a bitcoin treasury reserve and use the roughly $2.32 billion in net proceeds from the transaction for working capital and other general business needs.
Related: Businesses are purchasing bitcoin, including Trump Media and GameStop. Investors should follow these steps.
The Sarasota, Florida-based business, which runs the social media network Truth Social for President Donald Trump, called the transaction one of the biggest bitcoin treasury-reserve transactions for a publicly traded corporation. Devin Nunes, the CEO of Trump Media, claimed in a statement that the company now has over $3 billion in liquid assets and that bitcoin is available to its stockholders.
“Trump Media is focused on acquiring great assets, and this deal will give us the financial freedom to implement the rest of our strategies,” Nunes stated.
There are other businesses that have taken a bitcoin treasury position besides Trump Media. The business is following in the footsteps of MicroStrategy Inc. (MSTR), a software company and bitcoin player that currently operates under the name Strategy and claims to be the biggest corporate bitcoin holder in the world.
GameStop Corp. (GME), a videogame retailer and original meme stock, announced its first bitcoin purchase on Wednesday. Earlier in the week, Strive Asset Management, an exchange-traded fund manager co-founded by politician and entrepreneur Vivek Ramaswamy, announced its own bitcoin accumulation plan.
As a proponent of cryptocurrency, President Donald Trump has made it his mission to establish the United States as “the crypto capital of the world.” He held a dinner for the top holders of his $TRUMP joke coin (TRUMPUSD) last week at his Trump National Golf Club in northern Virginia. Vice President J.D. Vance pledged Wednesday to support the bitcoin “movement” in an address at the Bitcoin Conference in Las Vegas.
Following the confirmation of a story that it will issue and sell additional shares to invest in bitcoin, Trump Media’s price plummeted earlier this week. This action decreased the amount of the company that investors at the time possessed.
The stock has down 17.3% this week, despite Friday’s rebound, which would be its worst weekly performance since it fell 18.3% the week before on January 24.
The S&P 500 has increased 1.1% this week, while bitcoin has decreased 4%.
