Trump Media & Technology Group has pledged roughly 73% of its bitcoin holdings to an options program in which the counterparty is free to reuse the coins, according to the company's third-quarter Form 10-Q filed Monday, three weeks before holders of its $1 billion in convertible notes gain the right to demand repayment in cash.

The Truth Social parent held approximately 15,649 BTC as of Sept. 30, Chief Financial Officer Phillip Juhan said on Monday's earnings call, along with 7 million shares of BlackRock's IBIT, the iShares Bitcoin Trust exchange-traded fund. Of those coins, 11,385.20 BTC were committed to what the company describes as its bitcoin yield management program.

Per the filing, the program obliges Trump Media to post bitcoin as collateral “that the counterparty can rehypothecate at their sole discretion.” In practice, that means the pledged coins can be redeployed by the counterparty for its own purposes. The pledged coins carried a fair value of $951.4 million at quarter-end. The 10-Q does not identify the counterparty.

A separate 4,260.73 BTC, valued at $356.1 million on Sept. 30, sits as collateral for the convertible notes and cannot be withdrawn or distributed until the conditions in the indenture are met. Taken together, the two allocations account for about 15,646 BTC, nearly all of the holdings Juhan described.

How the yield program works

Trump Media sells and buys covered calls and puts on bitcoin — contracts that give the buyer the right to purchase bitcoin (a call) or sell it (a put) at a set strike price — settled in bitcoin, in order to “generate yield on these assets and increase our principal balance of bitcoin,” the filing states. Premiums are received 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 ranging from $68,000 to $92,000, and puts covering 1,500 BTC at strikes of $75,000 to $80,000, all expiring in October.

A risk factor in the 10-Q lays out the trade-offs. Trump Media notes that its yield counterparties “may not be rated” by credit agencies, that its ability to sell or use deployed bitcoin is limited while the arrangements remain open, and that where positions are unsecured “we may be unable to recover deployed bitcoin in a counterparty insolvency.”

Juhan added that Trump Media purchased 4,359 bitcoin during the quarter using proceeds from a partial sale of its IBIT stake, part of a broader shift toward “third-party institutional” management of its treasury.

A paper profit and a Nov. 30 deadline

Bitcoin's third-quarter rally put Trump Media in the black on paper. Net income came in at $409.7 million, driven by a $378.1 million gain on digital assets — a valuation gain, not operating income — as bitcoin climbed to roughly $84,000 on Sept. 30 from about $59,000 on June 30. Adjusted EBITDA, however, remained a loss of $12.3 million, and the company lost $234.2 million over the first nine months of the year.

Prices have since moved against the treasury. With bitcoin trading near $74,200 on Tuesday morning, the 15,649 coins were worth about $1.16 billion, roughly $145 million below their quarter-end value.

The larger test is the notes. Holders of the $1 billion in 0% senior secured convertible notes, due May 2028, can require Trump Media to repurchase them at full principal in cash on Nov. 30. General Counsel Scott Glabe said notices have gone out and that holders have until near the end of the month to respond, meaning the company cannot yet determine how much it will owe.

Interim CEO Kevin McGurn said the repayment plan calls for “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.

According to the 10-Q, Trump Media may enter into a new credit facility to refinance some or all of the notes, though the company cautions that “there can be no assurance” it can do so on acceptable terms. Juhan put gross financial assets at $2.3 billion, comprising $182 million in cash, $211 million in short-term investments and $1.7 billion in bitcoin and bitcoin-related assets.

Broader pressure

Trump Media is not the only corporate bitcoin treasury under pressure. Strategy, the largest corporate holder of the asset, slipped below its average acquisition cost on Monday, meaning its bitcoin holdings are, on paper, worth less than the company paid on average. The company also faces heightened 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.

Separately, shareholders are scheduled to vote Dec. 14 on the company's planned merger with fusion energy firm TAE Technologies, a deal management expects to close by year-end.