Trump Media Pledges 73% of Its Bitcoin to Options Yield Program

Trump Media & Technology Group has committed roughly 73% of its bitcoin to a yield program, according to a ForexCrunch report on the company’s quarterly disclosure. The filing covers a position of 15,649 BTC as of Sept. 30, of which 11,385.20 BTC sat inside a “bitcoin yield management program” while 4,260.73 BTC, valued at $356.1 million at quarter-end, served as collateral for debt.

Bitcoin Magazine reported that the pledged coins had a fair value of $951.4 million at quarter-end and that the arrangement allows the counterparty to reuse them. Neither outlet identified the counterparty, and the Quarterly 10-Q filing Trump Media lodged with the SEC does not name it.

Also read: Coinbase Wins Full OCC National Trust Charter

Key facts

• 11,385.20 BTC of the 15,649 BTC held on Sept. 30 was pledged to the yield program; a further 4,260.73 BTC was collateral for the convertible notes.
• Holders of $1 billion in 0% senior secured convertible notes, due May 2028, can require repurchase at full principal for cash on Nov. 30.
• Interim CEO Kevin McGurn said repayment would be “a mix of cash and credit” rather than new equity.
• The quarter produced $409.7 million of net income on a $378.1 million digital-asset gain, while adjusted EBITDA remained a $12.3 million loss.
• Bitcoin Magazine reported the company also held 7 million shares of BlackRock’s IBIT and bought 4,359 BTC during the quarter using proceeds from a partial sale of that position.

How the options program is structured

Under the program, Trump Media sells and buys covered calls and puts on bitcoin, with settlement in bitcoin, to earn yield and build its principal balance. According to Bitcoin Magazine’s account of the filing, premiums are paid in bitcoin and passed on to the company’s digital asset manager to be reinvested.

At quarter-end the written calls referenced 4,838.40 BTC at strikes between $68,000 and $92,000, and puts covered 1,500 BTC at $75,000 to $80,000, all expiring in October. The filing cautions that yield counterparties may carry no credit rating, that pledged coins cannot be sold or used while the arrangements run, and that where a position is unsecured the company “may be unable to recover deployed bitcoin in a counterparty insolvency.”

Also read: Citi and Coinbase Launch Stablecoin-to-Dollar Conversion for US Institutions

Why it matters

The disclosure lands less than three weeks before note holders decide whether to pull their money, and it means most of the treasury is not available for sale at market if a large buyback is tendered. General Counsel Scott Glabe said notices went out and holders’ response window runs to the close of the month, so the size of any repurchase is still unknown. Bitcoin Magazine reported that with bitcoin near $74,200 on Tuesday morning the 15,649 coins were worth about $1.16 billion, roughly $145 million below their quarter-end value, so the buffer between pledged assets and the debt has narrowed.

What to watch

The company said it may arrange a new credit facility to refinance some or all of the notes but that “there can be no assurance” it can do so on acceptable terms. The note holders’ window closes Nov. 30, and shareholders vote Dec. 14 on the planned merger with TAE Technologies, which management expects to complete by year-end.

The figures describe a balance-sheet position and reported past results; nothing here is financial advice, and crypto and equity markets remain volatile and uncertain.

Written by

StockPil Editorial

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Sources: ForexCrunch, Bitcoin Magazine