Trump Media & Technology Group has pledged about 73% of its bitcoin to an options program in which the counterparty can reuse the coins, the company disclosed in its third-quarter 10-Q filed Monday, three weeks before holders of its $1 billion in convertible notes can demand cash.
The Truth Social parent held approximately 15,649 BTC on Sept. 30, Chief Financial Officer Phillip Juhan said on Monday’s earnings call, along with 7 million shares of BlackRock’s IBIT. Of those coins, 11,385.20 were pledged to what the company calls its bitcoin yield management program.
The filing says that 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Another 4,260.73 BTC, worth $356.1 million on Sept. 30, sits as collateral for the convertible notes and cannot be withdrawn or distributed until the indenture’s conditions are met.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 about 15,646 BTC, nearly all of the stack Juhan described.
How the Trump Media options program works
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 says. Premiums arrive in bitcoin and are “immediately rehypothecated to our digital asset manager to reinvest.”
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 spells out the trade-off. The company says its 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 said 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.
A $409.7 million profit and a Nov. 30 deadline
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 about $84,000 on Sept. 30 from about $59,000 on June 30. Adjusted EBITDA was still 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 about $1.16 billion, roughly $145 million less than at quarter-end.
The bigger test is the notes. 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 said 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 said 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 said.
The 10-Q says 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 put 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.
Trump Media is not the only treasury company under pressure. Strategy, the largest corporate holder, slipped below its average cost on Monday. Trump Media also faces more political scrutiny after Democrats won Congress, with party leaders vowing to target Trump family crypto ventures and incoming Senate Banking Chair Elizabeth Warren preparing her own oversight push.
Shareholders vote Dec. 14 on the company’s planned merger with fusion energy firm TAE Technologies, which management expects to close by year-end.