Trump Media pledges 73% of its Bitcoin to options program weeks before $1B note deadline

Trump Media & Technology Group has tied up about 73% of its bitcoin in a yield programme weeks before $1 billion of convertible notes can be put back for cash.

The disclosure sits in the company’s third-quarter 10-Q filing, which shows 11,385.20 BTC of the 15,649 BTC it held on 30 September pledged to a “bitcoin yield management program”. A further 4,260.73 BTC, worth $356.1 million at quarter-end, stands as collateral for the notes and cannot be withdrawn until the indenture’s conditions are met. Between the pledge and the collateral, little of the stockpile is freely saleable.

What the filing warns

Under the programme, Trump Media sells and buys covered calls and puts on bitcoin, settled in bitcoin, to generate yield and add to its bitcoin holdings. But the filing also cautions that its 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 “we may be unable to recover deployed bitcoin in a counterparty insolvency”. The identity of the counterparty is not disclosed.

Holders of the $1 billion in 0% senior secured convertible notes, due May 2028, can require the company to buy them back at full principal for cash on 30 November. Interim CEO Kevin McGurn told investors the repayment would be “a mix of cash and credit” rather than new equity, saying the company wants to preserve as much of its bitcoin as possible to keep the yield strategy running. General Counsel Scott Glabe said notice has gone out to holders and their response window runs to the close of the month, leaving the size of any buyback still open.

The liquidity maths

For traders watching bitcoin’s correlation with risk appetite, the timing compounds the pressure: BTC was near $84,000 on 30 September, up from about $59,000 on 30 June, and the quarter’s $378.1 million digital-asset gain drove the reported $409.7 million net income while adjusted EBITDA stayed a $12.3 million loss. CFO Phillip Juhan set gross financial assets at $2.3 billion, a figure he broke down into $182 million in cash, $211 million in short-term investments and $1.7 billion in bitcoin and bitcoin-linked holdings, and he separately cited the 15,649 BTC holding along with 7 million shares of BlackRock’s IBIT on the earnings call. If the full $1 billion were put back for cash, the balance would lean heavily on assets that are pledged, encumbered or price-sensitive. The seven-week low earlier this month, when more than $1 billion in crypto longs were liquidated, showed how quickly treasury valuations can move against a company in a fortnight.

A shareholder vote on the merger with TAE Technologies is planned for 14 December. The next dated step is 30 November, when note holders’ response window closes.