Trump and the Race for Cash

[Wrestleknownothing]

Weren't lawsuits over how the spoils of DJT were to be split always inevitable?

https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rmc_C6wF3ZDU/v0

Trump is suing his co-founders saying they do not deserve their 8.6% after they sued him saying they do.

[Wrestleknownothing]

Q: When is $9 billion not $9 billion dollars?

A: When it is tied up for six months in Trump Media stock.

Yesterday the company filed a prospectus to issue additional shares for a wide variety of reasons to a handful of holders. Some of it will come from the exercise of options granted to the financiers, some of it may come from additional shares issued to Trump (assuming the stock stays above 17.50-ish for a period of time).

In the same prospectus they filed to allow Trump to sell all of his shares when the lockup period expires.

This now becomes the real race for cash.

What will Trump Media shares be worth by the time Trump is able to sell? And remember, his cost basis is zero. So it is all profit, even if he sells at $0.01.

At the current rate of free fall it does not look promising. After opening at $70.90 on March 26, the first day of trading, it has dropped nearly 67% to below $24. While that drop has been persistent (it has closed lower on 11 of 15 days), there have been two main events that caused larger than average daily drops.

1. When DJT filed financials with revenue of only $4 million and losses of $58 million, the stock dropped $13.30 (-22%).
2. With the filing of this prospectus and the market realization that 256% of the public float will likely be sold ASAP when the lockups expire, the stock was down $5.98 (-18%) yesterday.

Open questions:

1. Will Trump be able to earn the additional earnout shares? Or will the stock drop below the key levels between $12.50 and $17.50, invalidating the extra shares?
2. Regardless what will the price be when Trump begins to sell his shares the second the lockup expires? Before answering, remember that he will be selling more shares than are currently publicly available.
3. With a bunch of other selling shareholders (the financiers), now what do we think the stock trades for?
4. How come no one has posted their receipts yet? If you liked it at $70, you should love it at $24.

[Wrestleknownothing]

Epic rally in DJT.

Still no receipts?

[mspart]

Well, Trump's GA trial has been railroaded by the Appeals court.   That will take some time.   And the classified papers trial is on indefinite postponement.   

And who bets that Trump's appeal of the NY civil  trial $500 million verdict gets struck down?

mspart

[Wrestleknownothing]

I would not read too much into this, but since Biden exited the presidential race DJT is down 7%. DJT is, after all, a wildly volatile stock.

But it is also not really a stock in the traditional sense. It has a market value of ~$6.5 billion even though it may be lucky to sell $1 million in ads this quarter while losing a lot of money in the process. It is really just a meme stock and a way to participate in Donald Trump's popularity.

What do meme companies do when their stock is wildly over-valued? They sell more stock, of course. Bed, Bath and Beyond, Gamestop, Hertz, and others have all shown the way. And they always do this via at-the-market offerings instead of via secondary offerings. This makes sense because secondary offerings are marketed to institutional investors who have no interest in playing memes. But at-the-market offerings are targeted at retail investors who love the memes.

But DJT has a basic problem. It has been public for less than a year, and it cannot do an ATM offering until it has been public for a year. But there is a solution. There is a hedge fund who specializes in providing a bridge between a secondary and an ATM offering. And now they count DJT as a client. They inked a deal on Monday where DJT will sell $2.5 billion of stock to the hedge fund over time via a series of secondary offerings, and the hedge fund will immediately dump the shares in the market as they get them and give DJT a price that is almost guaranteed to be less than what they sold it for AND minus a 2.75% fee (and they get 200,000 free shares worth about $6.5 million for an extra kicker).

[Bigbrog]

4 minutes ago, Wrestleknownothing said:

I would not read too much into this, but since Biden exited the presidential race DJT is down 7%. DJT is, after all, a wildly volatile stock.

But it is also not really a stock in the traditional sense. It has a market value of ~$6.5 billion even though it may be lucky to sell $1 million in ads this quarter while losing a lot of money in the process. It is really just a meme stock and a way to participate in Donald Trump's popularity.

What do meme companies do when their stock is wildly over-valued? They sell more stock, of course. Bed, Bath and Beyond, Gamestop, Hertz, and others have all shown the way. And they always do this via at-the-market offerings instead of via secondary offerings. This makes sense because secondary offerings are marketed to institutional investors who have no interest in playing memes. But at-the-market offerings are targeted at retail investors who love the memes.

But DJT has a basic problem. It has been public for less than a year, and it cannot do an ATM offering until it has been public for a year. But there is a solution. There is a hedge fund who specializes in providing a bridge between a secondary and an ATM offering. And now they count DJT as a client. They inked a deal on Monday where DJT will sell $2.5 billion of stock to the hedge fund over time via a series of secondary offerings, and the hedge fund will immediately dump the shares in the market as they get them and give DJT a price that is almost guaranteed to be less than what they sold it for AND minus a 2.75% fee (and they get 200,000 free shares worth about $6.5 million for an extra kicker).

Me reading this...

[Wrestleknownothing]

8 minutes ago, Bigbrog said:

Me reading this...

Cliff Notes:

• DJT is about to add $2.5 billion cash to its balance sheet.
• But someone will be selling a shit-ton of stock as a result.
• So, caveat emptor.

[Bigbrog]

Just now, Wrestleknownothing said:

Cliff Notes:

• DJT is about to add $2.5 billion cash to its balance sheet.
• But someone will be selling a shit-ton of stock as a result.
• So, caveat emptor.

THANK YOU!!  LOL

I just ain't that smert wen it pertans 2 theesse cind of tings