MW 'DJT' stock rallies on report that shareholders face dilution. That's odd. But not in the world of crypto.
By Steve Goldstein
A report that Trump Media & Technology Group Corp. plans to dilute shareholders actually lifted its market value on Tuesday.
Trump Media & Technology, which trades under the ticker symbol "DJT" $(DJT)$, saw shares rally 9% in premarket trade after the Financial Times reported the company is planning to raise $3 billion to buy cryptocurrencies.
The report cited six people characterized as having been briefed on the situation as saying the company, controlled by President Donald Trump's family, plans to issue $2 billion in stock and another $1 billion through a convertible bond.
The company said "apparently the Financial Times has dumb writers listening to even dumber sources."
The Trump social-media company's underlying business at the moment has little value - in the first quarter, the company lost $31.7 million on revenue of less than $1 million. Its market valuation, however, was $5.7 billion.
The crypto strategy is reminiscent of one adopted successfully by Strategy (MSTR), formerly known as MicroStrategy, which trades at a premium to its underlying bitcoin (BTCUSD) holdings. That plan can work so long as bitcoin keeps rising in value.
Investor John Arnold, in a social-media post, said the financial-market boost companies see from buying bitcoin doesn't make sense.
"I've seen a lot of dumb stuff in my investing career but the 'arb' that exists in publicly traded companies buying BTC when ETFs already exist is as dumb as anything," he said in a post on the X social-media platform.
That the company buying bitcoin uses leverage doesn't justify the premium, he added.
"The leverage is low. You can lever an ETF yourself. There is no platform value because the barrier to entry is nil," said Arnold.
Read on:
Trump Media's losses narrow, sales rise in first quarter of Trump 2.0 era
Why Trump Media once again called out 'naked short selling' as its stock dropped
Can a president break insider-trading laws? Trump's Truth Social post ignites fierce debate.
-Steve Goldstein
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May 27, 2025 08:21 ET (12:21 GMT)
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