Trump Media Puts 73% of Bitcoin Cache in Options Scheme Ahead of $1B Note Deadline

Trump Media & Technology Group has committed roughly 73% of its bitcoin holdings to an options program where the counterparty has the ability to reuse the digital assets. The company made the disclosure in its third-quarter 10-Q filing with the SEC on Monday, just three weeks before investors holding $1 billion in convertible notes have the right to demand repayment in cash.

Chief Financial Officer Phillip Juhan stated during Monday's earnings call that the Truth Social parent owned around 15,649 BTC as of Sept. 30, alongside 7 million shares of BlackRock's IBIT. From that total, 11,385.20 BTC were allocated to what the firm terms its bitcoin yield management program.

According to the filing, the program requires Trump Media to post bitcoin as collateral "that the counterparty can rehypothecate at their sole discretion." Those pledged coins had a fair value of $951.4 million at the end of the quarter. The 10-Q does not identify the counterparty.

An additional 4,260.73 BTC, valued at $356.1 million on Sept. 30, is held as collateral for the convertible notes and cannot be withdrawn or distributed until conditions under the indenture are satisfied.

Together these two categories total roughly 15,646 BTC, accounting for nearly all of the bitcoin stack that Juhan described.

How the Trump Media options program works

Trump Media buys and sells covered calls and puts on bitcoin, settled in the cryptocurrency itself, with the goal of "generating yield on these assets and increasing our principal balance of bitcoin," the filing states. Premium payments come in bitcoin and are "immediately rehypothecated to our digital asset manager to reinvest."

As of the end of the quarter, the company had written calls referencing 4,838.40 BTC with strike prices between $68,000 and $92,000, as well as puts on 1,500 BTC with strikes from $75,000 to $80,000, all set to expire in October.

A risk factor outlines the potential downside. The company notes its yield counterparties "may not be rated" by credit agencies, that its ability to sell or use bitcoin already deployed is limited while arrangements remain active, and that in cases where the arrangement is unsecured "we may be unable to recover deployed bitcoin in a counterparty insolvency."

Juhan said Trump Media acquired 4,359 bitcoin during the quarter using proceeds from a partial sale of its IBIT holdings, part of a move toward "third-party institutional" management of its treasury.

A $409.7 million profit and a Nov. 30 deadline

The rise in bitcoin's price during the third quarter pushed Trump Media into profitability on paper. Net income came in at $409.7 million, fueled by a $378.1 million gain on digital assets as bitcoin climbed from around $59,000 on June 30 to nearly $84,000 on Sept. 30. Adjusted EBITDA remained a loss of $12.3 million, and the company posted a $234.2 million loss for the first nine months.

Prices have since moved lower for the portfolio. With bitcoin trading near $74,200 on Tuesday morning, the 15,649 coins are valued at about $1.16 billion, roughly $145 million less than at quarter-end.

The convertible notes present a more significant challenge. Investors holding the $1 billion in 0% senior secured convertibles, which mature in May 2028, can force Trump Media to repurchase them at full principal in cash on Nov. 30. General Counsel Scott Glabe said notices have been sent and holders have until late in the month to respond, leaving the company unable to determine its exact liability at this point.

Interim CEO Kevin McGurn indicated the repayment plan would involve "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 states that the company may seek a new credit facility to refinance some or all of the notes but warns that "there can be no assurance" it will secure acceptable terms. Juhan put gross financial assets at $2.3 billion, which includes $182 million in cash, $211 million in short-term investments and $1.7 billion in bitcoin and bitcoin-related holdings.

Trump Media is not the only corporate treasury facing pressure. Strategy, the largest corporate holder, fell below its average cost on Monday. The company also confronts increased political scrutiny following Democratic victories in Congress, with party leaders promising to target Trump family crypto ventures and incoming Senate Banking Chair Elizabeth Warren preparing her own oversight initiative.

Shareholders are scheduled to vote on Dec. 14 regarding the company's proposed merger with fusion energy firm TAE Technologies, which management expects to finalize by year-end.