Trump Media & Technology Group pledged approximately 73% of its bitcoin holdings to an options program in which the counterparty can reuse the coins, the company disclosed in its third-quarter 10-Q filing on Monday. The Truth Social parent held approximately 15,649 BTC on Sept. 30, of which 11,385.20 were pledged to its bitcoin yield management program, according to Chief Financial Officer Phillip Juhan. The disclosure comes three weeks before holders of the company's $1 billion in convertible notes can demand cash repayment on Nov. 30. The company reported $409.7 million in net income for the quarter, driven by a $378.1 million gain on digital assets as bitcoin climbed to approximately $84,000 on Sept. 30 from approximately $59,000 on June 30. Trump Media operates as the parent company of Truth Social and is navigating both the convertible note deadline and increased political scrutiny following Democratic gains in Congress.
Trump Media Pledges 11,385 Bitcoin to Rehypothecation Program
Trump Media's Q3 10-Q filing shows 11,385.20 BTC pledged to what the company calls its bitcoin yield management program. The filing states the program requires Trump Media 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. The 10-Q does not name the counterparty.
Another 4,260.73 BTC, worth $356.1 million on Sept. 30, sits as collateral for the convertible notes and cannot be withdrawn or distributed until the indenture's conditions are met.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 approximately 15,646 BTC, nearly all of the stack Juhan described. The company also held 7 million shares of BlackRock's IBIT.
Company Operates Covered Call and Put Strategy for Yield
Trump Media 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 states. Premiums arrive in bitcoin and are "immediately rehypothecated to our digital asset manager to reinvest."
At quarter-end the company 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 in the filing states the company's yield counterparties "may not be rated" by credit agencies, that it is limited in its ability to sell or use deployed bitcoin while the arrangements are open, and that where they are unsecured "we may be unable to recover deployed bitcoin in a counterparty insolvency."
Juhan stated Trump Media bought 4,359 bitcoin during the quarter with proceeds from a partial sale of its IBIT position, part of a shift toward "third-party institutional" management of its treasury.
Q3 Net Income Reaches $409.7 Million on Bitcoin Gains
The bitcoin rally in the third quarter turned Trump Media profitable on paper. Net income was $409.7 million, driven by a $378.1 million gain on digital assets as bitcoin climbed to approximately $84,000 on Sept. 30 from approximately $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.
Prices have since moved against the stack. With bitcoin near $74,200 Tuesday morning, the 15,649 coins are worth approximately $1.16 billion, roughly $145 million less than at quarter-end.
Trump Media Faces Nov. 30 Convertible Note Deadline
Holders of the $1 billion in 0% senior secured convertibles, due May 2028, can require Trump Media to buy them back at full principal for cash on Nov. 30. General Counsel Scott Glabe stated notices have gone out and holders have until near the end of the month to respond, so the company cannot yet say how much it will owe.
Interim CEO Kevin McGurn stated the plan is "a mix of cash and credit" rather than new equity. "We want to preserve as much of our Bitcoin as possible to continue our yielding strategy and allow that asset to recover," he stated. The 10-Q states the company may enter a new credit facility to refinance some or all of the notes, but adds that "there can be no assurance" it can do so on acceptable terms. Juhan stated gross financial assets at $2.3 billion, including $182 million in cash, $211 million in short-term investments and $1.7 billion in bitcoin and bitcoin-related assets.
Shareholders vote Dec. 14 on the company's planned merger with fusion energy firm TAE Technologies, which management expects to close by year-end. Trump Media faces increased political scrutiny after Democrats won Congress, with party leaders vowing to target Trump family crypto ventures and incoming Senate Banking Chair Elizabeth Warren preparing oversight efforts.
FAQ
What percentage of Trump Media's bitcoin is pledged to the options program?
Trump Media pledged approximately 73% of its bitcoin holdings—11,385.20 BTC out of roughly 15,649 total—to its bitcoin yield management program, according to the company's Q3 10-Q filing. The counterparty can rehypothecate these coins at their sole discretion.
When can convertible note holders demand repayment from Trump Media?
Holders of Trump Media's $1 billion in 0% senior secured convertible notes can require the company to buy them back at full principal for cash on Nov. 30. General Counsel Scott Glabe stated notices have been sent to holders, who have until near the end of the month to respond.
