• The stock price of Trump Media plummeted by more than 17% in after-hours trading.
• The Truth Social owner said its registration of additional shares had been declared effective by the Securities and Exchange Commission.
• Trump Media, which trades under the DJT ticker, saw its share price slump by nearly 10% during the regular trading day.

The stock price of Trump Media plunged by more than 17% in after-hours trading Tuesday after the Truth Social app owner said its registration of additional shares had been declared effective by the Securities and Exchange Commission.

Trump Media, which trades under the DJT ticker, had seen its share price slump by nearly 10% during the regular trading day.

The SEC's declaration authorizes early investors in Trump Media to exercise public warrants they hold in the company, whose majority shareholder is former President Donald Trump.

Trump Media in a prospectus filed Tuesday with the SEC said that up to 14,375,000 additional shares would be issuable upon the exercise of those warrants.

The company noted there could be "a significant decline in the public trading price" of the stock if warrant holders sold their shares or there was a "perception that these sales could occur."

But Trump Media said that existing shareholders who sold at a lower prices after the registration "could still "experience a positive rate of return on the shares ... due to the lower price per share" when they purchased them.

The prospectus also said, "If all warrants covered by the Registration Statement are exercised for cash, [Trump Media] may receive up to an aggregate of approximately $247 million in proceeds."

"Additionally, $40 million of restricted cash on the Company's balance sheet will become unrestricted as a result of the Registration Statement becoming effective," the prospectus said. "These funds would supplement the more than $200 million in unrestricted cash the Company now retains."

Trump Media CEO Devin Nunes, in a statement said, "Today marks another milestone for Truth Social."

"With our S-1 declared effective, we're expecting to be well positioned to energetically pursue TV streaming, other enhancements to the platform, and potential mergers and acquisitions," Nunes said.

"With approximately 620,000 retail shareholders supporting our vision, the company looks forward to expanding quickly and robustly."