Short sellers who bet against Donald Trump's media company lost $420 million in the six weeks leading up to Tuesday's election victory.
Financial analysis firm S3 Partners on Wednesday issued a report detailing how short sellers have been making wrong bets as Trump Media and Technologies Group's stock has soared nearly 200% since late September. published a book.
Trump Media, the parent company of the president-elect's social media platform Truth Social, announced Tuesday night into Wednesday morning that the 45th president will return to the White House for a second term after vote tallies revealed that the 45th president will return to the White House for a second term. It rose by 35%.
Trump, 78, defeated his Democratic opponent, Vice President Kamala Harris. He once again defied the odds, making a political comeback that was unthinkable after his loss to Joe Biden in 2020.
However, the stock price fell more than 18% by the close of trading on Wednesday. The company's shares fell more than 11% in premarket trading Thursday.
On Wednesday, when Trump won the election, short sellers faced losses on 14 million shares at $5.50 per share, or $77 million, the report said.
With increased volatility, short-term interest rates, lack of earnings, and loyal support from retail investors, DJT “checks the boxes as a meme stock,” S3 said.
S3 is at risk of a “short squeeze” due to the stock's high volatility, significant interest from short sellers, a relatively small number of shares available for trading, and large losses for short sellers. He said that
This refers to a rapid rise in a stock's price that forces short sellers to buy back shares to cover their position, causing the stock price to rise further.
Trump Media & Technology Group operates Truth Social, a social media site and streaming service. Trump himself is the company's largest shareholder.
Trump's most ardent supporters are pledging to the same never-sell mentality, also known as the “diamond hand,” as crypto holders.
Hundreds of fans of the stock gathered Tuesday night for an election watch party on the online video sharing platform Rumble. There they bounced between stock prices, Trump's odds on election gambling site Polymarket, and the election results.
In the week before the election, trading in Trump Media stock was halted several times as the stock soared in a chaotic frenzy.
“DJT remains a post-election focus for market participants due to a high concentration of short positions and heightened volatility,” the report said.
The company added that stock prices should normalize closer to President Trump's inauguration in January.
The biggest beneficiary of rising stock prices will be the next president. Since March, Trump's stake in the company has risen to $5.2 billion, according to Reuters calculations.
On Wednesday, it was worth $4.1 billion.
The stock, along with online gambling sites such as Polymarket and Calci, has become a proxy for President Trump's re-election chances.
Polymarket gamblers collectively spent more than $3.7 billion betting on the presidential election.
An anonymous French gambler named Theo bet $30 million on Mr. Trump's victory and made a profit of $48 million.
with post wire
