The announcement of a $2.5 billion private placement caused the stock prices of Trump Media & Technology Group (NASDAQ: DJT) to drop by 9%. Although the stock initially rose during premarket trading, it ultimately closed at $23.39, highlighting investor concerns.
In this private offering, the company plans to issue $1.5 billion in common stock and $1 billion in zero-interest, convertible senior secured notes. More than 50 institutional investors have already signed up for the offering. The funds raised will be used to create a Bitcoin treasury and to provide support for the platforms Truth Social, Truth+, and Truth. Fi will also see expansion. The anticipated closing date for the offering is May 29, 2025.
Even with the exciting fundraising moves, DJT’s stock remained volatile. The price temporarily increased to $26 before falling again. The backlash indicates that investors are concerned about the company's direction and future financial management.
Trump Media considers Bitcoin an essential part of gaining financial freedom. CEO Devin Nunes believes that the company’s significant investment in Bitcoin aligns with its “America First” policies. As part of its plans, the company wants to apply Bitcoin for both payment and integration with utility tokens.
Crypto.com and Anchorage Digital will manage the Bitcoin reserves. The company made headlines for being one of just a handful of public corporations to invest so heavily in Bitcoin. The deal has placement agents from Yorkville Securities, Clear Street, BTIG, and Cohen & Company, as well as a financial advisor, Cantor Fitzgerald.
As of Q1 2025, the company owned $759 million in cash and short-term investments. Due to the additional funding, Bitcoin will now be classified as a balance sheet asset. Still, experts and investors are questioning whether introducing so much cryptocurrency into the company’s operations adds lasting benefits or may lead to higher risks.
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Famous financial commentator Peter Schiff, who argues that gold is a better investment than crypto, was critical of the news. According to Schiff’s social media post, Trump Media could use its investors’ money to build a Bitcoin reserve for Trump’s benefit. He also questioned why the project would add crypto reserves when outside investors are still financing it.
In contrast, news about the ban led to an increase in Bitcoin’s price. Bitcoin rose above $110,000, gaining 4.72% in a single day and attracting $55.8 billion in trading volume. It shows that many public companies are adopting cryptocurrencies.