Why Trump Media & Technology Group Stock Is Soaring Today
Why Trump Media & Technology Group Stock Is Soaring Today
Trump Media & Technology Group (NASDAQ: DJT) stock is surging Monday. The social media company's share price was up 20.4% as of 12:15 p.m. ET, according to data from S&P Global Market Intelligence.
After a brutal stretch of sell-offs, Trump Media stock is gaining ground today following recent comments from the company stating that it will receive a major new funding source thanks to stock warrants being exercised. The stock may also be gaining ground in conjunction with developments in one of the court cases against the former president and current presidential candidate.
Trump Media scores a cash injection
On Friday, Trump Media published a press release stating that it expected to receive more than $69.4 million in cash proceeds from stock warrants exercised on June 20 and June 21. If all warrants covered by the registration statement that was approved by the Securities and Exchange Commission (SEC) on June 18 are executed, the company says it could generate a total of $247 million in proceeds.
While the company says it is focused on building and expanding the reach of its platforms over near-term revenue, the business posted sales of just $770,500 in the first quarter. Meanwhile, Trump Media posted a net loss of roughly $327.6 million in the quarter and closed out the period with cash and equivalents totaling $273.7 million.
With the business posting sizable losses and little revenue at this point, the confirmation of new capital injections is welcome news for shareholders. But even with today's big pop, the stock is still down roughly 21.5% over the last month.
Legal developments could also be giving Trump Media stock a bump
A federal judge is hearing arguments today about whether former President Donald Trump should be restricted from making comments about FBI agents and issues related to a search for classified documents that was conducted at his Mar-a-Lago estate in 2022.
The former president's team is arguing that any restrictions related to the matter would be a violation of his First Amendment rights and put unreasonable confines on his presidential campaign. A potential gag order could also have significant implications for Trump Media stock. Trump Media's core business revolves around the Truth Social platform. The service is used as a go-to social media soap box for the former president.
If Donald Trump is prevented from saying certain things, that could limit the appeal of Truth Social and other platforms run by the company. Accordingly, some investors may be seeing signs that the former president is unlikely to be barred from making statements and interpreting that as a bullish sign.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.