- Trump Media sold about 20 million shares to the small investment shop Yorkville Advisors, which helped it raise about $450 million in cash over 2024. The deal comes after the two firms signed a standby equity purchase agreement last July.
Over the course of last year the Trump Media and Technology Group (TMTG) raised $450 million by selling company shares at a discount to a small New Jersey financial firm that specializes in small- and micro-cap stocks.
The money TMTG raised from its stock sales to Yorkville Advisors represented a significant portion of the hefty amount of cash currently on its balance sheet. Despite losing roughly $400 million in 2024, TMTG has about $776.8 million in cash, cash equivalents and short-term investments, and only $24.7 million in debt, according to SEC filings released last week.
The $450 million raised from its stock sales to Yorkville Advisors accounts for roughly 57% of the cash on hand TMTG had at the end of the year. Despite its robust balance sheet, TMTG’s income statement tells the story of a company that, at the moment, is hemorrhaging cash. The company only had $3.6 million in revenue that led to the $400 million in net losses.
The funding from Yorkville was a substantial source of capital for TMTG in a year when it expanded its business beyond its flagship Truth Social platform.
Over the course of the year TMTG sold 20.3 million shares at various prices between $14.31 and $36.98 a share, according to the filing. The filings do not reveal how many transactions took place or when. However, based on the disclosed range of the purchase, it would appear that at least some of TMTG’s stock sales took place around September. In that month TMTG’s share price hit an all-time low of $12.15 before rebounding 323% at the end of October. Its share price now sits at $29.82.
The sale was part of an existing agreement between TMTG and Yorkville dating back to July. In the deal, known as a standby equity purchase agreement, Yorkville is instructed to purchase shares of TMTG at the company’s direction. In exchange, Yorkville gets a discount, paying only 97.25% of the share price at the time of the sale. These sorts of agreements are common among new companies. In essence, the deal gives TMTG a guaranteed source of capital should it need to raise any, while Yorkville gets to buy a security at a discount that it can then sell for full price on the open market should it choose to.
These transactions are not subject to disclosures under a section of the Securities Act that exempts issuers from having to report share sales that don’t involve public offerings. However, they were included in TMTG’s annual report. TMTG and Yorkville Advisors did not respond to a request for comment.
TMTG said the money it had raised from the sales of its shares to Yorkville was used for “working capital and general corporate purposes.”
Over the course of 2024 the bulk of TMTG’s operating expenses went to research and development and general and administrative costs, where it spent $49 million and $131 million, respectively. Its total operating losses for the year were $186 million, which were not offset by its negligible revenues.
In addition to owning Truth Social, the X-like social media platform, TMTG also has a streaming service, Truth+, and plans for a yet-to-be released fintech platform dubbed Truth.Fi.
In its annual report the company said there were too many “uncertainties” regarding the launch of its news businesses to know when it would be able to turn a profit. “TMTG believes it is premature for TMTG to predict when it will attain profitability and positive cash flows from its operations,” the company wrote in the report.
