This Trump-linked company's stock-sale plan is more than double its market value

By Tomi Kilgore

Phunware's stock sinks to lowest price since before Trump's Iowa GOP primary win

Shares of Phunware Inc. tumbled Tuesday toward the lowest price seen since January, after the mobile-advertising software company announced a relatively large stock-sale program.

The at-the-market equity distribution program, in which shares could be sold at market prices through a broker, would be for proceeds of up to $120 million. That amount represents about 161% of Phunware's current market capitalization of $46 million.

The stock (PHUN) sank 9.6% in midday trading to put it on track for its lowest close since Jan. 12.

That was the session before the stock skyrocketed 453.5% on Jan. 16, as Donald Trump was projected to win Iowa's Republican presidential caucuses that night.

The company stressed that it wasn't adding to the potential sale of shares as part of a shelf filing, in which a company registers securities for sale in case it chooses to do so in the future.

"To clarify, we are not adding incremental overhang to our original $200 million universal shelf," said Chief Executive Mike Snavely. "Alternatively, we are terminating our prior sales distribution agreement, and adding Canaccord Genuity, Roth MKM, and Benchmark Company as additional investment banks into this upgraded program."

Back in February 2022, the company had entered into a at-the-market stock-sale agreement with H.C. Wainwright & Co. for the sale of up to $100 million worth of common stock. But last week, Phunware told H.C. Wainwright that it had decided to terminate that agreement. The company did not expect to incur any "material" termination penalties for ending the agreement, it said.

Phunware has been linked with the former president since the company announced a strategic relationship with American Made Media Consultants in May 2020 to develop and launch a mobile app for the Trump-Pence 2020 re-election campaign.

From the archives (October 2021): Phunware's stock was up 1,000% on Friday. What in the world is Phunware?

Phunware's stock, which underwent a 1-for-50 reverse stock split in late February that helped it regain compliance with the Nasdaq's minimum-bid listing requirement, has rallied 39.8% year to date but has plunged 80.6% over the past 12 months.

In its annual report filed in mid-March, the company removed its "going concern" warning, saying it no longer believed there was any substantial doubt about its ability to continue as a going concern for one year. In an early November filing, the company had warned that it had substantial doubt about its ability to continue as a going concern.

Among other Trump-linked companies, shares of Trump Media & Technology Group Corp. (DJT), the parent of Trump's social-media platform Truth Social, were down 3.8% on Tuesday but have soared 157% year to date.

And shares of Rumble Inc. (RUM), which airs conservative-leaning content, were shedding 2.3% on Tuesday but have rallied 32.7% this year.

-Tomi Kilgore

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06-04-24 1258ET

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