Trump Media & Technology Group, the company behind Truth Social, plans to raise around US$3 billion.

According to the Financial Times, the funds will support investments in cryptocurrencies, including bitcoin.

The group is reportedly targeting US$2 billion in fresh equity and US$1 billion more via a convertible bond.

Details about the timing and structure of the deal could still change.

Trump Media has not responded to the report as of now.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ A dramatic funding goal for a company with minimal revenue

TMTG’s plan to raise $3 billion for cryptocurrency investments represents a striking contrast to its current financial reality.

The company reported just $3.67 million in trailing revenue while posting a net income loss of approximately $105 million, according to recent financial data 1.

With only 29 full-time employees and a price-to-sales ratio of 1,420, TMTG is attempting to raise an amount equivalent to 53% of its entire $5.67 billion market capitalization 1.

This fundraising ambition comes after the company has already faced significant financial challenges, including a total loss of $31.5 million since its inception as reported in November 2023 2.

The disparity between the company’s current financial performance and its fundraising goals raises questions about investor confidence and the viability of such a significant capital raise in the current market.

2️⃣ Leveraging the documented connection between social media and cryptocurrency

TMTG’s strategy aligns with research showing connections between social media platforms and cryptocurrency investment behavior.

Studies indicate that approximately 50% of social media users have invested in cryptocurrencies, compared to only 10% of non-users 3.