Trump Media stock tanks 9% after ‘bitcoin reserve’ announcement, investors to buy $2.5 billion via share purchase

US President Donald Trump's media company said Tuesday that institutional investors will buy $2.5 billion in the company's stock with the proceeds going to build up a bitcoin reserve. Trump Media said it intends to use the proceeds for the creation of a “bitcoin treasury.”

About 50 institutional investors will put up $1.5 billion in the private placement for common shares in the company and another $1 billion for convertible senior notes, according to Trump Media and Technology Group, the operator of Truth Social and other companies.

Trump Media to build ‘bitcoin reserve’

“This investment will help defend our Company against harassment and discrimination by financial institutions, which plague many Americans and U.S. firms," said Trump Media CEO and Chairman Devin Nunes in prepared remarks. Shares of Trump Media & Technology Group Corp., based in Sarasota, Fla., tumbled 9%

Other companies have adopted similar strategies through cryptocurrency. Cloud and mobile software developer MicroStrategy Inc. has built up a treasury reserve containing billions worth of bitcoin through stock sales and debt financing.

Trump, who referred to cryptocurrencies in his first term as “not money,” citing volatility and a value "based on thin air," has shifted his views on the technology. During an event at his Mar-a-Lago club in Florida during his presidential campaign in May 2024, Trump received assurances that crypto industry backers would spend lavishly to get him reelected.

Last week, Trump rewarded 220 of the top investors in one of his other cryptocurrency projects — the $Trump meme coin —with a swanky dinner luxury golf club in Northern Virginia, spurring accusations that the president was mixing his duties in the White House with personal profit.

Trump Media has been exploring potential mergers and acquisitions as it aims to diversify into financial services. Last month, it reached a binding agreement to launch various retail investment products, including crypto and exchange-traded funds aligned with Trump's policies.

The Trump family, long rooted in skyscrapers and country clubs, has opened multiple beachheads in crypto, quickly gaining hundreds of millions of dollars. Those other crypto forays include Trump NFTs, a meme coin, a stake in a newly formed bitcoin producer called American Bitcoin and World Liberty Financial, a decentralized crypto platform that offers a stablecoin pegged to the U.S. dollar.

But the crypto push has attracted scrutiny from lawmakers, including Democratic Senator Elizabeth Warren, who last month asked the U.S. securities regulator about its plans to supervise ETFs due to be launched by Trump Media.