Trump Media Raises $2.5 Billion to Acquired Bitcoin, Despite Initial Doubts
Trump Media and Technology Group (TMTG), the parent organisation of Truth Social and partly owned by former President Donald Trump, has confirmed a substantial capital injection of $2.5 billion (AU$3.8 billion) aimed at acquiring Bitcoin. This announcement came just one day after the company publicly dismissed earlier reports about the fundraising from the Financial Times.
The capital raise is bifurcated into two main components: $1.5 billion (AU$2.33 billion) will be sourced from the sale of common stock at the latest closing price, while the remaining $1 billion (AU$1.56 billion) will come from convertible senior secured notes, which are priced at a 35% premium but carry a 0% coupon. The transaction is anticipated to close on May 29.
TMTG has highlighted that its Bitcoin holdings will be secured alongside $759 million (AU$1.1 billion) in cash and short-term investments recorded at the end of Q1. Custody of the digital assets will be managed by Anchorage Digital and Crypto.com, ensuring a robust safeguard for the company’s cryptocurrency.
In a statement, TMTG Chief Executive Officer Devin Nunes expressed the organisation’s view of Bitcoin as a vital instrument for financial freedom, claiming that this strategic investment will serve as an essential asset to protect the company against alleged discrimination and harassment from traditional financial institutions.
Interestingly, this confirmation comes on the heels of TMTG’s somewhat dismissive response to the Financial Times’ report, which cited anonymous sources regarding the company’s plans. Nunes commented on the matter, suggesting that the original piece was based on misguided or "dumb" sources.
However, the stock market responded negatively to the news. TMTG shares plummeted by over 12%, trading at approximately $23.05 (AU$35.7) shortly after the announcement, according to Google Finance data.
This investment strategy aligns TMTG with a growing number of publicly traded companies embracing Bitcoin as a financial asset. Notable among these is Strategy (formerly known as MicroStrategy), which has recently allocated an additional $427 million (AU$658 million) to acquire more Bitcoin.
In conclusion, Trump’s media venture is pivoting to cryptocurrency with a significant financial commitment, framing Bitcoin as part of its asset strategy amid market scepticism.
