The public debut of Trump Media & Technology Group DJT has been one of the bigger storylines of 2024 and the company is now warning of potential stock manipulation.
What Happened: After a long awaited SPAC merger with Digital World Acquisition Corporation, Trump Media & Technology Group (TMTG) is now publicly traded.
The stock gives investors a way to bet for or against former President Donald Trump and also his social media company.
After hitting a high of $79.38 in its first day of public trading, shares of Trump Media & Technology Group have pulled back.
The risk of the company restricting share borrowing complicates efforts to bet against Trump’s stock through short selling.
This strategy could reduce the number of shares available for short selling and increase the cost of borrowing.
DJT Price Action: Trump Media & Technology Group shares are up 11.3% to $42.86 versus a 52-week trading range of $12.40 to $79.38, which includes time as Digital World Acquisition.
Read Next: Stock Manipulation In Trump Media & Technology Group Stock?
Trump Media and Technology Group DJT’s public debut has been one of the major stories of 2024, and the company is now alerting investors to the possibility of stock manipulation.
A recent report claimed that millions of dollars had been made by investors who shorted the newly listed stock.
What occurred was that Trump Media & Technology Group (TMTG) became a publicly traded company following the eagerly anticipated SPAC merger with Digital World Acquisition Corporation. Investors can use the stock to place bets on the former president Donald Trump, his social media business, or both.
The stock of Trump Media & Technology Group has declined after peaking at $79.38 on its first day of trading.
Despite growing short interest rates and high borrowing costs, a number of investors have been placing bets on the media company’s stock to decline. Fintel data indicates a 214.9% cost of borrowing and a 10.8% float short.
As reported by ABC News, investors who were interviewed by the Associated Press claimed to have made money betting on shares falling through the use of put options and shorting the stock.
Many of the individuals who are betting against the new stock are doing so because of the company’s financials, while some are doing so because they dislike Trump.
“Trump isn’t the outstanding businessman he believes he is. Many of his ventures fail spectacularly, fast,” an interviewee told the Associated Press.
S3 Partners and FactSet data indicate that investors have shorted the stock and used put options to profit $200 million on paper thus far.
Related Link: Expect a big showdown between Trump and Biden in 2024 elections according to betting odds.
The Reason It Matters: A few investors are aware of the possibility of a short squeeze that could drive up stock prices. The growing number of Trump supporters who may buy the stock to show their support and help with his fundraising and legal endeavors is also acknowledged.
Ihor Dusaniwsky of S3 Partners predicted, “You’re going to see the mother of all squeezes if DJT starts rallying.”. If not for those who are easily moved. “.”.
Trump holds 57.6% of the 78.75 million shares that make up the parent company of Truth Social, with an additional 36 million shares that could be acquired through earn-outs. Due to a lock-up agreement that was a component of the merger, the former president is currently unable to sell shares.
In the upcoming months, Trump selling a sizable number of shares might potentially lower the share price.
Short selling strategies to bet against Trump’s stock are complicated by the possibility that the company will restrict share borrowing.
In addition to cautioning investors to protect their shares from being lent to short sellers, the company has notified Nasdaq of possible illicit short selling of its shares. This tactic might make fewer shares available for short sales and raise borrowing costs.
Although TMTG’s stock has lost 44% of its value over the past month, it has gained 17% over the last five trading days due to the headline news about short selling and the continued volatility of the stock during Trump’s hush money trial.
DJT Price Action: Following the Digital World Acquisition, shares of Trump Media & Technology Group have increased 11.3 percent to $42 points86, out of a 52-week trading range of $12 points40 to $79 points38. With a year ago, shares have increased by 208%.
Next Read: CEO Devin Nunes Calls On House GOP Leaders To Look Into Possible Stock Manipulation in Trump Media & Technology Group Stock.
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