Reed Smith serves as legal counsel to placement agents in Trump Media's $2.5 billion bitcoin treasury deal

Rhea-AI Summary

Trump Media and Technology Group Corp. (NASDAQ/NYSE: DJT) has completed a landmark $2.5 billion bitcoin treasury deal, marking one of the largest cryptocurrency acquisitions by a public company. The deal includes $1.5 billion in common stock and $1 billion in convertible senior secured notes, involving approximately 50 institutional investors. The private placement offering closed on May 29, 2025, with Yorkville Securities and Clear Street LLC as co-lead placement agents. The convertible notes feature a 35% premium conversion price, and the acquired bitcoin will join Trump Media's existing $759 million in cash and equivalents. Reed Smith, led by Constantine Karides, served as legal counsel to the placement agents, demonstrating their growing presence in crypto-related transactions.

Positive

• Substantial $2.5 billion capital raise strengthens company's financial position
• Large institutional investor participation (50 investors) demonstrates strong market confidence
• Strategic bitcoin treasury acquisition diversifies company's balance sheet
• 35% premium on convertible notes indicates favorable terms for the company
• Significant existing cash position of $759 million shows strong liquidity

Negative

• Potential share dilution from $1.5 billion common stock issuance
• Future dilution risk from $1 billion convertible notes
• Exposure to bitcoin's price volatility could impact balance sheet stability
• Increased debt burden from convertible notes

Insights

Financial Strategist

Trump Media's $2.5B bitcoin treasury acquisition represents one of the largest corporate crypto investments, significantly diversifying its balance sheet.

This $2.5 billion bitcoin treasury acquisition represents a landmark transaction in corporate treasury management. The deal's structure combines $1.5 billion in common stock issuance at market price and $1 billion in convertible senior secured notes at a 35% premium to current prices.

The premium on convertible notes indicates strong institutional investor confidence, with approximately 50 institutional investors participating in this private placement. The transaction effectively transforms the company's treasury strategy by placing bitcoin alongside $759 million in existing cash and short-term investments reported at Q1 2025.

This deal positions DJT among the pioneers in large-scale corporate crypto treasury adoption. The allocation represents a substantial portion of the company's balance sheet and reflects a significant strategic decision to diversify treasury assets beyond traditional holdings.

The successful execution of this private placement with institutional investors demonstrates market confidence in both the company and its bitcoin treasury strategy. By bringing in new capital rather than converting existing treasury assets, the company has expanded its financial resources while simultaneously diversifying its treasury composition.

Legal & Regulatory Analyst

The complexity of this transaction is evident through the engagement of multiple placement agents and specialized legal counsel. Reed Smith's Crypto and Digital Assets Group provided critical expertise in navigating the legal frameworks surrounding institutional-grade cryptocurrency transactions.

The private placement structure to institutional investors represents a carefully constructed approach to regulatory compliance. By utilizing this mechanism rather than direct market purchases, the company established a methodical path for bitcoin treasury implementation that addresses potential regulatory considerations.

The involvement of four placement agents – Yorkville Securities and Clear Street as co-leads, alongside BTIG and Cohen & Company – underscores the sophisticated financial architecture required for transactions of this magnitude in the crypto space.

Reed Smith's statement about "accelerating momentum" in crypto transactions is supported by their involvement in multiple deals, including the recent KindlyMD and Nakamoto Holdings merger. This suggests the development of specialized legal frameworks for bitcoin treasury strategies across different industries.

The convertible note component, structured as senior secured debt, provides additional legal protections for institutional participants while offering upside potential through the conversion feature. This balanced approach to risk management reflects thoughtful legal structuring in an evolving regulatory landscape.

MIAMI, June 13, 2025 /PRNewswire/ -- Global law firm Reed Smith served as legal counsel to the placement agents in Trump Media and Technology Group Corp.'s groundbreaking $2.5 billion bitcoin treasury deal, one of the largest cryptocurrency treasury acquisitions by any public company.

Trump Media and Technology Group Corp. (NASDAQ: DJT, NYSE: DJT), operator of the social media platform Truth Social, the streaming platform Truth+, and the fintech brand Truth.Fi, entered into subscription agreements with approximately 50 institutional investors for a private placement offering comprising $1.5 billion in common stock and $1 billion in convertible senior secured notes. The offering closed on May 29, 2025.

Yorkville Securities, LLC and Clear Street LLC acted as co-lead placement agents, with BTIG, LLC and Cohen & Company Capital Markets acting as co-placement agents. Reed Smith acted for the placement agents in the transaction.

"Recent deals in the crypto arena clearly showcase the rapidly accelerating momentum in the market. This latest transaction, along with several others in recent weeks, is a powerful testament to the surging interest, confidence and investment pouring into the space," said Constantine Karides, chair of Reed Smith's Crypto and Digital Assets Group.

The $2.5 billion offering, comprising approximately $1.5 billion in Trump Media common stock at the last market price and $1 billion in convertible notes at a conversion price equal to a 35 percent premium, will place bitcoin on Trump Media's balance sheet alongside existing cash, cash equivalents and short-term investments totaling $759 million as of the end of the first quarter of 2025.

The Reed Smith team was led by Karides, along with capital markets partners Anne Peetz and Katherine Geddes.

Reed Smith recently served as legal counsel on the merger between health care company KindlyMD, Inc. and Nakamoto Holdings Inc., a bitcoin-native holding company, to start a bitcoin treasury strategy.

About Reed Smith

Reed Smith is a dynamic international law firm dedicated to helping clients move their businesses forward. With an inclusive culture and innovative mindset, we deliver smarter, more creative legal services that drive better outcomes for our clients. Our deep industry knowledge, long-standing relationships and collaborative structure make us the go-to partner for complex disputes, transactions and regulatory matters.

View original content:https://www.prnewswire.com/news-releases/reed-smith-serves-as-legal-counsel-to-placement-agents-in-trump-medias-2-5-billion-bitcoin-treasury-deal-302481341.html

SOURCE Reed Smith LLP

FAQ

What is the size of Trump Media's (DJT) bitcoin treasury deal?

Trump Media's bitcoin treasury deal is valued at $2.5 billion, consisting of $1.5 billion in common stock and $1 billion in convertible senior secured notes.

How many institutional investors participated in DJT's private placement offering?

Approximately 50 institutional investors participated in Trump Media's private placement offering.

What is the conversion premium for DJT's convertible notes?

The convertible notes have a conversion price set at a 35 percent premium to the market price.

How much cash and equivalents did Trump Media (DJT) have before the bitcoin deal?

Trump Media had $759 million in cash, cash equivalents, and short-term investments as of the end of Q1 2025.

Who were the placement agents for Trump Media's bitcoin treasury deal?

Yorkville Securities and Clear Street LLC served as co-lead placement agents, with BTIG, LLC and Cohen & Company Capital Markets as co-placement agents.