Shares of Trump Media & Technology Group (DJT) plummeted 5.13% in intraday trading on Tuesday, as investors reacted to the company's announcement of a massive $2.5 billion deal to create a Bitcoin treasury. The sharp decline comes despite the ambitious nature of the cryptocurrency investment, highlighting investor concerns over potential stock dilution and the risks associated with such a large-scale move into digital assets.

In a surprising turn of events, Trump Media & Technology revealed plans to issue and sell approximately $1.5 billion in common stock and $1.0 billion in convertible senior secured notes to around 50 institutional investors. The company stated that the proceeds from this offering would be used to establish a Bitcoin treasury, marking one of the largest such initiatives by a public company to date. The deal is expected to close on or about May 29, 2025, potentially increasing Trump Media's liquid assets to over $3 billion.

While the creation of a Bitcoin treasury could be seen as a bold strategic move, the market's negative reaction appears to stem from concerns over shareholder dilution. The issuance of new shares and convertible notes is likely to decrease the value of existing stockholders' ownership stakes. Additionally, some investors may be wary of the risks associated with such a significant investment in the volatile cryptocurrency market, especially for a company primarily known for its social media platform rather than financial services.