Trump Media stock tanks: Here's what investors need to know

And shares of Trump Media looking well down as well, plummeting yesterday as the company filed it for additional stock issuance on the same day the former President Donald Trump hush money trial began, the stock now down over 40% since it started publicly trading. Last month. We saw that filing come through what literally while Squawk was on, we’re trying to make sense of it. We’re going to continue right now because Liz Hoffman is here, Semaphore business and finance editor and a CNBC contributor. She’s got a big conference coming up in Washington, DC later this week. So congratulations ahead of that. Yeah. But let’s let’s talk about where what you, when you saw that filing, what you think that filing is even trying to say. I I, I don’t know. I mean I’ve read it a couple Times Now. I think ultimately it’s actually not, they’re not issuing new stock. They’re registering some warrants that were sort of already baked into the pie. But again, like this is a company that just like incredibly volatile, not that good at explaining anything it’s doing and heavily owned by retail investors who don’t really know what’s going on, which is how you end up with with a move like that. So but I think the big question is when do we think that this board, if if if the board is going to decide to allow the former president or others to sell their shares before the six month window, how does that work? What kind of disclosure would be necessary? Does the stock move up or down on that news? I mean I think these are the things that I think people who are invested in this are trying to figure out. And then the question is what it means to be invested in this company, right. So for which way it moves like you could make a case for either way right. Like it it floods the market with new shares which should generally depress the price. But actually there there isn’t this is a hard stock some how to get your hands on because there’s isn’t a lot of it so you could see it you know creating a a a buying swell that kind of brings the whole thing up. I don’t know I mean God the shareholder lawsuits that would immediately follow waving a lock up you can do it but I think it’d be be pretty messy. But then I think to the point you’re trying to make it’s like who why does anyone own the stock. This is a company with a single product that not that many people use. It is been losing money hand over fist. I’m not surprised. Eventually I think you’ll see them issue new equity because they’re gonna have to $60 million last year I think. Doesn’t this allow them to get around the the issue of the waiver? I mean if it effectively brings forward some sales and so it’s to your point about you know like an uprising if a waiver were granted it being so unfair etc. This actually allows them to sort of get around that. I think what it does is it, it would allow him to be the president, President Trump, to be more liquid in that it’s converting some warrants into stock that he could perhaps borrow against. That’s one piece we haven’t really talked about and seen. There hasn’t been a lot of disclosure, but there’s a big slug of stock worth still probably a billion have $2 billion that he could borrow. Look, there are people that you can find on Reddit and elsewhere who actually talk about this. Now, how does a meme stock or as some as an investment, but actually as a financing vehicle, literally a campaign financing, You know, the beauty of transfer of wealth from the investor investor community could be effectively A donor who’s saying I’m effectively donating my funds to the former president by investing in this stock such that he can then sell his shares later to be used for the campaign. And. And the beauty of that is that if you lose money, you take the loss. So you can donate money, right. The stock goes up. You’re like, Oh yeah, I’m supporting the President Trump. That’s exactly what I want to do. Stock goes down, You lose money, right. And you take the loss. But again, it’s a little hard to tell. Like again, you can donate to President Trump’s campaign if you want to, but you could take the loss. But then are we assuming these are really sophisticated investors who are doing like tax loss harvesting? I probably not. But I’m just saying that that’s that that is I think what you need. You should. What we need to watch for by the way, is if in fact the stock actually moves higher in a meaningful way, could it be that there are a bunch of people, very wealthy people, possibly people from outside the country or others who actually literally are pushing the stock up, meaning it’s not an investment really is a way to actually transfer wealth. I rather than just being a a a a retail investor, which I I always think when we use that phrase it’s sort of dismissive, but but it shouldn’t be. I mean, for the moment this thing is still trading to me like a like a meme stock and you know it’s going to be for six months out from an election. I would expect it to be a bit of a heartbeat for the campaign. But you know, this is more broadly. I haven’t totally understood the business case for these kind of ideological echo chambers. You’ve seen parlor Gab rumble like they were all supposed to be the next big thing, and I don’t think they are. And even more broadly, you know, public Square kind of the the America First marketplace, you know, it’s worth 20 bucks a share and now it’s down under 5. Like, I think if you’re going to try to own the lives these things are kind of built on, Let me ask you this.