SEC approves registration statement, TMTG unlocks $2.3 billion in funds.
The U.S. Securities and Exchange Commission (SEC) officially approved Trump Media and Technology Group's (TMTG) registration statement on June 13, giving the green light for its $2.3 billion Bitcoin inventory transaction. TMTG is the company behind the Truth Social platform owned by former President Trump, with significant control by the Trump family.
According to SEC documents, the agency 'declared effective' the S-3 registration statement submitted by TMTG on June 6. The S-3 form is used by U.S. companies to register various securities sales with the SEC, including stocks, options, and different types of debt. TMTG subsequently submitted the corresponding final prospectus to the SEC on the same day.
According to the document, TMTG successfully raised $2.3 billion by reselling approximately 56 million shares of equity and 29 million shares of convertible bond-related shares to about 50 investors. The deal was completed on May 30, and TMTG hailed it as 'one of the largest Bitcoin inventory transactions by a public company.' Currently, about 84.7 million shares held by early investors have been registered for resale, equivalent to about half of the public float and 30% of all outstanding shares.
Aggressive expansion strategy, Bitcoin inventory becomes a core layout.
TMTG CEO and President Devin Nunes stated in a press release that the company is 'actively' implementing expansion plans, aiming to transform Trump Media into an indispensable company that continually expands its customer base for the patriot economy. He emphasized that the company will enhance and develop social media platforms, television streaming platforms, and fintech brands while establishing Bitcoin inventory.
Establishing Bitcoin inventory will allow Bitcoin to appear on TMTG's balance sheet alongside cash and cash equivalents, providing shareholders with exposure to Bitcoin. Crypto.com and Anchorage Digital will be responsible for custodian of TMTG's Bitcoin inventory holdings.
Nunes stated when announcing the deal on May 27 that the Bitcoin inventory would enable the company to 'defend against harassment and discrimination from financial institutions' and create synergies for 'subscription payments for Truth Social and Truth+ streaming platforms, utility tokens, and other planned transactions.'
The prospectus states that TMTG will acquire Bitcoin and Bitcoin-related holdings in amounts and on a timeline that it deems best. The company's Bitcoin strategy may also include purchasing Bitcoin-related securities, or selling Bitcoin under specific market conditions and investing the proceeds in cash, cash equivalents, or other interest-bearing investments.
Diversification of Bitcoin layout, ETF application proceeding simultaneously.
The Bitcoin inventory is just one of the ways TMTG is solidifying its position in the Bitcoin market. On June 5, the company submitted an application to the SEC to launch a Bitcoin Exchange Traded Fund (ETF): Truth Social Bitcoin ETF. Crypto.com will be the exclusive custodian of all Bitcoin held by the ETF, which will reflect the price performance of Bitcoin.
According to reports from the Financial Times, Don Wilson, founder and CEO of one of the world's largest trading firms DRW Investments, invested $100 million in TMTG's Bitcoin inventory fundraising round. According to SEC documents, DRW Investments purchased more than 3.8 million shares of TMTG, making it one of the largest investors in TMTG's Bitcoin inventory.
This investment raises concerns about conflicts of interest with the current U.S. government, as Cumberland, a cryptocurrency liquidity provider controlled by Wilson, clearly benefited during Trump's second term. In March this year, the SEC withdrew a lawsuit filed against Cumberland under former SEC Chairman Gary Gensler, which accused it of acting as an unregistered securities dealer through the sale of crypto assets.
Stock price performance and future outlook.
TMTG shares trade on the Nasdaq under the code DJT. On June 13, TMTG's stock price fell by 2.06%, closing at $19.52. The prospectus also includes a general framework that allows the company to raise additional stocks, debt, or warrants valued up to $12 billion at any time.
However, TMTG stated in a press release that 'there are currently no immediate plans to issue any securities under the registration statement framework.'
In addition to Truth Social, TMTG also operates the Truth+ streaming service and launched a fintech brand with cryptocurrency ambitions, Truth.fi, earlier this year. The press release referred to Truth.fi as 'a financial service and fintech brand combining American-first investment tools.'
This Bitcoin inventory program symbolizes a significant strategic shift for TMTG in the cryptocurrency industry and reflects the Trump administration's increasingly friendly attitude towards digital assets. With the funding in place and regulatory approval completed, when and how TMTG deploys this $2.3 billion to purchase Bitcoin will become the focus of market attention.
'SEC approves Trump Media application! $2.3 billion available to buy Bitcoin, will the stock price skyrocket?' This article was first published in 'Crypto City.'
