Ok, we have all been watching the gyrations of the DJT stock as it spirals down. Well, the self-declared Mensa group associated with TFG running the Truth Social company has decided to issue “millions of additional shares”? CNBC story is here.
So, you have a stock where the premium charged for shares to short the stock has been at an exorbitant level. Now, you are going to release new shares out there to be available — wonder what will happen?
Yup, another 21.4 million “warrants” (the right to buy shares at a given price) are to be issued. This is lightly different that an option in that the warrant requires you to buy the shares rather than just cash out.
And the warrants are exercisable at $13.69 per share. This means that another 21.4 million shares will be on the market at less than half the price that it trades now. In other words, this is setting a new lower price below the current price for a whole bunch of new shares.
It is now trading under $28 per share — down over $4.75 per share. Look out below.