(Bloomberg) -- Investors backing Donald Trump’s media startup may see their stake diluted after the company registered 38 million shares as part of a financing pact with Yorkville Advisors.
Shares of Trump Media & Technology Group Corp. sank 9.1% before Tuesday’s open, giving back a chunk of a 31% gain logged Monday after a failed assassination attempt on the former president over the weekend boosted momentum for the so-called Trump trade across markets.
The registration starts the clock on the potential dilution of existing shareholders related to the deal, which allows Yorkville to buy as much as US$2.5 billion of stock from the owner of Truth Social at a discount. The company has the right but not an obligation to sell the shares, which could come as early as Tuesday, a filing shows.
As part of the pact, Yorkville would get a 2.75% discount of the market price over a one- or three-day period. Yorkville was paid $25,000 and was slated to receive 200,000 common shares as part of the deal. EF Hutton LLC, the banker on the deal, was to be issued 125,000 shares as part of the pact within one business day.
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