Why Trump Media Stock Is Gaining Today
Trump Media & Technology Group Corp. (NASDAQ:DJT) saw its shares rise in premarket trading on Tuesday after announcing a definitive agreement with Yorkville Acquisition Corp. (NASDAQ:YORK) and Crypto.com to form a joint venture.
The new entity, Trump Media Group CRO Strategy, will manage one of the largest digital asset treasuries, focused on the Cronos ecosystem’s native token, CRO.
According to Benzinga Pro, DJT stock has lost over 20% in the past year. Investors can gain exposure to the stock via First Trust SkyBridge Crypto Industry and Digital Economy ETF (NYSE:CRPT).
Also Read: Trump-Backed American Bitcoin Eyes Japanese, Hong Kong Firms For Crypto Acquisition: Report
The latest deal will make Yorkville, Trump Media, and Crypto.com founding shareholders of the new firm, which intends to accumulate billions of dollars in CRO alongside significant cash commitments and credit facilities.
At closing, the partners expect the new company to be capitalized with about $1 billion worth of CRO—representing nearly one-fifth of the token’s market value at the time of the announcement—alongside $200 million in cash and $220 million from warrant exercises.
An affiliate of Yorkville, YA II PN, Ltd., has also pledged an equity line of up to $5 billion.
This combination is set to make Trump Media Group CRO Strategy the first publicly traded treasury focused solely on CRO and one of the largest digital asset treasuries relative to its market capitalization.
Meanwhile, Yorkville Acquisition Corp. plans to update its trading symbol to “MCGA” on Nasdaq prior to the merger’s completion. According to Benzinga Pro, YORK stock has gained over 12% in the past year.
Returning to the development, the lock-up structure agreed upon by the partners requires them to hold their founding stakes for a minimum of one year, followed by a phased release schedule over the next three years.
“Financial markets are becoming increasingly digital every day, and companies of all sizes and sectors are strategically planning for the future by establishing digital asset treasuries anchored by assets that have created a comprehensive value proposition and are poised for even greater utility,” said Devin Nunes, chairman and CEO of Trump Media & Technology Group.
Kris Marszalek, co-founder and CEO of Crypto.com, says the project “will encompass more than the entire current market capitalization of CRO, with the additional commitments of over $400 million in cash and a further $5 billion line of credit facility to acquire additional CRO.”
The firm will deploy a validator node within the Cronos ecosystem, enabling it to secure the network and earn staking rewards.
According to The New Yorker, the Trump family made $3.4 billion from the president's time in the White House — about $2.3 billion of that from cryptocurrency ventures.
Price Action: YORK shares are trading down by 2.06%, $10.44 a share, at last check on Tuesday. DJT shares are trading higher by 4.9% to $18.07 at the time of publication.
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