Trump Media & Technology Group stock sank, adding to its 60% monthly decline, after the Truth Social-parent announced Tuesday plans to scale up a live television streaming service.
The company, backed by former President Donald Trump, reported Tuesday it has finished research and development of a live TV streaming platform and that it plans to begin building its own content delivery network, called "CDN."
The Trump stock dropped more than 14% to 22.84 Monday during market action. DJT shares are now down more than 29% this week after a federal regulatory filing Monday showed Trump Media's intent to issue millions of additional shares.
Trump Media has a three phase plan for its livestreaming service. The company expects the content to be "news networks, religious channels, family-friendly content including films and documentaries."
Trump Media said there will also be "other content that has been canceled, is at risk of cancellation, or is being suppressed on other platforms and services."
"We're excited to move forward with the next big phase for Truth Social," Trump Media Chief Executive Devin Nunes said in the press release.
On Monday, the Truth Social-parent company filed a "preliminary prospectus" with the U.S. Securities and Exchange Commission (SEC) to offer 21.49 million shares of common stock, issuable "upon the exercise of warrants."
The company is also looking for approval of the resale of up to 146.1 million shares from "selling securityholders," which includes Donald Trump and ARC Global Investments, according to the federal filing.
Trump holds a 58% stake in the Truth Social-parent operation. However, the former president is prohibited from selling shares for six months. Trump's holdings are currently valued at around $2 billion, based on the DJT stock price.
Donald Trump could receive another 36 million earnout shares if DJT shares remain above $17.50 in 20 out of any 30 trading days for a 90-day period dated from March 25, according to the SEC filing.
Trump Stock, DWAC And Truth Social
Trump Media jumped more than 16% on March 26, its first day trading under the DJT ticker, hitting a high of 79.38 intraday. This followed Digital World Acquisition becoming Trump Media & Technology Group after successfully merging with Trump's tech and social-media platform on March 22. The special purpose acquisition company stock had rallied 35% on the day before the change to "DJT."
DWAC took Trump Media and Technology Group, or TMTG, public in a reverse merger. After a prolonged battle, DWAC stockholders voted in favor of the special purpose acquisition company's merger with TMTG. Trump Media is the parent of the conservative social-media platform Truth Social.
DJT shares have dropped more than 56% since their conversion. In 2024, DJT/DWAC has gained 44%.
Truth Social originally launched after Twitter, now X, shut down Trump's account following the Jan. 6, 2021, riot at the U.S. Capitol.
In October 2021, Truth Media and DWAC announced their plan to merge. Federal investigations delayed the proposed merger for years. However, on Feb. 14, DWAC announced that the U.S. Securities and Exchange Commission (SEC) proclaimed the merger's registration statement was effective, approving the proposed combination to go forward.
The Donald Trump brand and the value of Trump Media are closely related. Trump's current status as the top Republican candidate for president figures squarely into the stock's gains so far this year. Federal charges could potentially tarnish that brand, according to company filings, although so far that has not been the case.
Trump is also chairman of TMTG while a number of his allies, including his son Donald Trump Jr., are board members.
On April 1, Trump Media & Technology reported a loss of $58.19 million in 2023 on revenue totaling $4.13 million, up from $1.47 million in 2022, according to SEC filings.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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