Trump Media & Technology Group is in the news today after reporting a $409.7 million profit in Q3, reversing a $238.1 million loss in Q2. Gains on digital assets and equity securities drove the turnaround.
At the time of writing, DJT traded at $4.10. Its shares closed at $4.06 on 9 November, up 1.75% before the earnings release.
What drove Trump Media’s Q3 profit?
Trump Media recorded combined gains of $496.1 million on digital assets and equity securities. The largest contribution was a $200.8 million unrealized gain on Bitcoin [$BTC] pledged for its Options strategy. By quarter-end, the company had pledged 11,385.20 $BTC for that strategy.
A further $107.5 million came from unrealized gains on Bitcoin and Cronos [CRO] holdings.
Equity securities contributed about $118 million in realized and unrealized gains.
After derivatives losses and other investment items, the company reported $60 million in net investment income. CFO Phillip Juhan linked that income to a rise in BlackRock’s iShares Bitcoin Trust ETF (IBIT).
This reflects the 42% increase in IBIT’s closing share price to roughly $47 on September 30th, from roughly $33 on June 30th.
During the quarter, Trump Media also used proceeds from a partial sale of its IBIT holdings to buy 4,359 $BTC.
Could Trump Media keep its Bitcoin?
Trump Media’s debt could be the next test for its Bitcoin [$BTC] holdings. Holders of up to $1 billion in convertible notes could demand cash repayment on 30 November.
Interim CEO Kevin McGurn said the company favors using cash and credit and wants to “preserve as much of our Bitcoin as possible.” Management also clarified that the amount holders would seek remains uncertain.
At quarter-end, Bitcoin made up about half of the $718.5 million in collateral backing the notes. Bitcoin-related securities and restricted cash accounted for the rest.
On 5 November, two transfers sent about 4,259 $BTC to Crypto.com from wallets that Arkham labeled as note collateral. The total was close to the 4,260.73 $BTC listed in the filing.
The repayment deadline comes before Trump Media shareholders vote on the proposed TAE Technologies merger on 14 December. TAE drew another $100 million from Trump Media on 7 October, after the quarter-end cash snapshot.
Final Summary
- Trump Media posted $409.7 million in Q3 profits as crypto and equity gains reversed its Q2 losses.
- DJT rose by 0.99% to $4.10 in overnight trading after the earnings release.
Source: ambcrypto.com. Adapted by NBTC.
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