Trump Media’s Move into Live Streaming: The Pros and Cons for Investors
Trump Media (NASDAQ:DJT) is set to experience movement in its shares as the stock market opens tomorrow following an all-stock deal to acquire most of WorldConnect Technologies’ (WCT) assets. This strategic move will help establish its content distribution network (CDN) for streaming TV, beginning with the Truth Social platform before expanding to other platforms. The plan was announced in April as part of a three-step strategy to introduce live TV to Truth Social.
The comprehensive deal includes agreements with WCT, Perception Group, Perception TVCDN, and FORA, granting Trump Media global rights to utilize new CDN technology. Additionally, there is an option for Trump Media to potentially acquire Perception entirely in the future. The deal is valued at up to 5.1 million shares of DJT’s stock and $17.5 million over three years, with the closing dependent on the full setup of Perception’s software.
In order to finance its growth, Trump Media has secured an agreement with Yorkville Advisors to issue up to $2.5 billion in shares over three years at a 2.75% discount to the market price. This move is likely to result in increased dilution for investors in the near future as controversies surrounding former President Trump, who is the largest shareholder of DJT, have influenced the stock’s performance over the past three months, leading it down by 23.38%. As a result, investors may need to carefully consider and monitor market trends before making any investing decisions regarding Truth Social stock.
In conclusion, while this acquisition may bring some benefits for Trump Media’s growth and expansion plans, it also comes with risks and uncertainties that investors must be aware of before making any investment decisions regarding Truth Social’s stock (DJT).
