Trump Media & Technology Group Corp. (NASDAQ:DJT) slumped in trading on Thursday after the company announced that the Securities and Exchange Commission (SEC) has declared the company’s registration statement on Form S-1 as effective. This form is related to the resale of some shares and warrants by certain security holders issued by the company.
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Impact of the Registration Statement on DJT
The operator of the Truth Social platform stated that it wouldn’t receive any proceeds from the sales or resale of the securities. However, the company added that if all warrants are exercised for cash, it could receive up to $247 million.
Additionally, with the registration statement (Form S-1) becoming effective, around $40 million of restricted cash on DJT’s balance sheet will become unrestricted. Restricted cash is held by the company for specific reasons and is not available for immediate ordinary business use. This cash would supplement the approximately $200 million in unrestricted cash already held by the company.
Is DJT Stock a Good Buy Right Now?
There are still no analysts covering DJT stock. Therefore, we turn to the last five days of trading, which were not kind to Truth Social, as shares are down by more than 20% in that interval. Meanwhile, modest rallies occurred on two occasions after the initial drop, but neither had the strength to pull the stock out of its doldrums.
