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Investing.com -- Trump Media & Technology Group Corp. (NASDAQ:DJT) stock rose 8% after announcing plans to establish a digital asset treasury company focused on acquiring Cronos ecosystem’s native cryptocurrency token (CRO).
The company revealed it has entered into a definitive agreement with Yorkville Acquisition Corp. (NASDAQ:YORK) and Crypto.com to form Trump Media Group CRO Strategy, Inc. The new entity will be majority-owned by the three founding partners and is expected to receive funding consisting of $1 billion in CRO tokens (representing approximately 19% of the total CRO market cap), $200 million in cash, and $220 million in mandatory exercise warrants.
Additionally, an affiliate of Yorkville, YA II PN, Ltd., will provide a $5 billion equity line of credit, potentially making the new venture "the first and largest publicly traded CRO treasury company," according to the announcement.
"Financial markets are becoming increasingly digital every day, and companies of all sizes and sectors are strategically planning for the future by establishing digital asset treasuries anchored by assets that have created a comprehensive value proposition and are poised for even greater utility," said Devin Nunes, Chairman and CEO of Trump Media & Technology Group.
The founding partners have committed to a one-year initial lock-up period on their shareholdings, followed by an additional three-year restrictive release schedule, demonstrating their long-term commitment to the venture.
Crypto.com CEO Kris Marszalek highlighted the unprecedented scale of the project, noting that it "will encompass more than the entire current market capitalization of CRO, with the additional commitments of over $400 million in cash and a further $5 billion line of credit facility to acquire additional CRO."
Following the business combination, the new entity plans to implement a digital asset treasury strategy centered on accumulating and actively managing CRO tokens, including establishing and operating a validator node to participate in network security and governance.
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