Key facts
- The 10-Q says the options counterparty can rehypothecate pledged bitcoin at its sole discretion and is not named.
- Pledged coins carried a fair value of $951.4 million at September 30, per the filing.
- Another 4,260.73 BTC, worth $356.1 million, is collateral for the convertible notes and cannot be withdrawn.
- Trump Media wrote calls on 4,838.40 BTC at $68,000 to $92,000 strikes and puts on 1,500 BTC, all expiring in October.
- Adjusted EBITDA was a loss of $12.3 million; the company lost $234.2 million over the first nine months.
- Interim CEO Kevin McGurn said repayment would use a mix of cash and credit rather than new equity.
Trump Media & Technology Group pledged 11,385.20 bitcoin, about 73% of the 15,649 BTC it held on September 30, to an options program in which the counterparty can reuse the coins, according to its third-quarter 10-Q filed November 9. The filing says the program requires the company to post bitcoin as collateral "that the counterparty can rehypothecate at their sole discretion." The pledged coins carried a fair value of $951.4 million at quarter-end, and the 10-Q does not name the counterparty.
A further 4,260.73 BTC, worth $356.1 million on September 30, sits as collateral for the convertible notes and cannot be withdrawn or distributed until the indenture's conditions are met. Together the two buckets account for about 15,646 BTC, nearly all of the stack CFO Phillip Juhan described on the November 9 earnings call, alongside 7 million shares of BlackRock's IBIT.
The program sells and buys covered calls and puts on bitcoin, settled in bitcoin, to "generate yield on these assets and increase our principal balance of bitcoin," the filing says. At quarter-end it had written calls referencing 4,838.40 BTC at strikes from $68,000 to $92,000 and puts on 1,500 BTC at $75,000 to $80,000, all expiring in October. A risk factor says yield counterparties "may not be rated" and that where arrangements are unsecured "we may be unable to recover deployed bitcoin in a counterparty insolvency."
The third-quarter bitcoin rally turned Trump Media profitable on paper: net income was $409.7 million, driven by a $378.1 million gain on digital assets as bitcoin rose to about $84,000 on September 30 from about $59,000 on June 30. Adjusted EBITDA was a loss of $12.3 million, and the company lost $234.2 million over the first nine months. With bitcoin near $74,200 on November 10, the 15,649 coins were worth about $1.16 billion, roughly $145 million less than at quarter-end.