Traders Are Betting Millions That Trump Media Will Tumble

[brooklynite]

New York Times

Before former President Donald J. Trump’s social media company made its stock market debut, many investors were lining up to bet on its collapse. After the company’s share price plunged following an initial surge, the appetite to bet against the stock has grown even more ravenous.

Trump Media & Technology Group, which trades under the ticker DJT, slipped on Wednesday to below $50 per share, extending a steep decline this week that pulled the stock down from its high near $80 and erased more than $2 billion of market value.

Trump Media is the most “shorted” special purpose acquisition vehicle in the country, according to the financial data company S3 Partners. Short-sellers bet that the price of a stock will fall. They do that by borrowing shares of a company and selling them into the market, hoping to buy them back later at a lower price, before returning the shares to the lender and pocketing the difference as profit.

The demand to short Trump Media, the parent company of the social media platform Truth Social, is so great that stock lenders can charge enormous fees, making it hard for short-sellers to turn a profit unless the shares fall significantly. Still, there is a lot of interest in taking the bet.

[Lonestarblue]

1. No company operated solely as a Trump propaganda outlet is a good investment.

Neither is a company that lost over $58 million in one year. The only probable way for the company to survive is if he wins the presidency again. I’m sure Republicans are looking into every possible way to cheat to make that hapoen.

[Probatim]

27. Lots of companies lose amounts in excess of $58 million - the hard part is to do it on revenues of $4 million.

That's the genius of trump and makes one wonder about money laundering.

[Mr.WeRP]

2. It's a pretty safe bet at this point.

What matters is the timing. Put premiums on options past May are 4:1 call premiums, so the short pressure is massive. This could trigger a squeeze, but I don’t think there are enough idiots with enough money to push this stock into that territory.

[Zambero]

3. And to think that these fools could have bailed out Trump's casinos

Guess no one was pushing to "take the bet" at the time!

[RAB910]

4. The company is insanely over-valued. The company made a little over 4 million in revenue.

They lost $58 million. That sort of company would normally be valued in the 10s of millions of dollars, not in the billions.

Companies are often valued based on their growth prospects. What are the prospects for a Twitter knockoff? Now that Musk owns Twitter, you have two right-wing lie/hate machines competing, and Twitter is much bigger.

It's not like Trump is getting new and more followers; he is bleeding followers.

It's not like companies are lining up to run ads to his limited audience that is mostly there to post propaganda or to see what their emperor is posting.

I think right now this is maybe a $10 million dollar company

[SouthernDem4ever]

12. Shows how reliable the stock market is as a retirement plan

Nothing is valued for sane reasons.

[RAB910]

15. Investment is a passion of mine. Individual stocks are a challenge. The market in general can be a great way to grow

a nest egg. When I was a young man out of college, I lost money in a big downturn in the 1980s, and I stayed away from the stock market for decades after that. I have a huge regret. If I had stayed in the market, I would easily have enough money to be retired right now. Historically the overall stock market has only gone up. Buy and hold an index fund ETF for long enough you will make money, good money

[comradebillyboy]

28. Indeed, my various Vanguard Fund investments are making

my retirement very comfortable despite a rather paltry income from the pension payments from my former employers. Most of the places I worked had employee investment plans and I always contributed the max allowed, as did my wife. Those investments are paying off rathe handsomely I must say.

[LiberalFighter]

23. Truth followers??

It's not like Trump is getting new and more followers; he is bleeding followers.

The fewer followers the less likely he will be elected.

[marble falls]

5. Why would this company do any better than 90% of TFG's other companies? ...

... he only formed it to sell off his own shares.

[FakeNoose]

24. And now Chump is legally restricted from selling the stock

By the time he can sell any shares, it will probably be worthless. Meanwhile he's suing his "partners" and trying to take over all of their shares as well. If he wins that lawsuit, it's a SURE THING the company will go down in flames.

[marble falls]

25. I heard they hid all the ketchup at Mar A-Lardo.

[getagrip_already]

6. Its dangerous to short a cult stock.... traded internationaly at low volume

Right now, it's a fools market. This stock is just not going to follow market norms.

Fools, trolls, and enemies will jump in to pump the price up regardless of fundamentals. The company could close its doors and the stock would keep trading.

That will end when the orange panty stain has no more shares and no interest in the company. Or when he dumps so many shares onto the market so quickly he outpaces the fools ability to keep up.

Not before.

[IronLionZion]

11. I don't like short selling but I hate Trump

So I'm rooting for them to destroy him financially. His stupid supporters are going to lose this one.

[RAB910]

16. Shorting any stock is dangerous as their is literally unlimited loss potential. Buying options is a much safer way to

bet on Trump's stock tanking. It's currently down roughly 3.5% today as of this posting.


Stocks like this, don't just tank straight down. It will be dips and small climbs with a general downward trend. So people will get into the stock thinking they are buying "on the dip" only to realize they "tried to catch a falling knife"

[twodogsbarking]

7. Genghis Don.

[lostnfound]

8. This itself is more grift. One giant bubble and transfer of wealth

Who are the short-buyers? Who are the short-sellers?
Who actually is losing out?
It can be a transfer of wealth not much different than a campaign contribution, a bribe, extortion payment, etc.
Under the veneer of an inflated stock now falling.
A rock is falling from the top of the Empire State Building. You own a piece of that rock. As it starts its descent, a secret benefactor says “you pay me a dollar and if it keeps falling another 50 feet, I’ll pay you a hundred.” You both know it’s going to fall, and the benefactor is going to “lose” money, but he records it as a loss on his income statement, and you get rich/paid off.

Rinse, repeat. It can be money laundering by another name.

[edhopper]

9. This

The current prices do not reflect the Company value. It is all about people playing against the short sellers. It is a casino game.

[LiberalFighter]

21. And TSF bankrupt his casino.

[Auggie]

14. Wouldn't surprise me to learn Trump is among them, betting against his own stock

[Disaffected]

26. I can't figure out how losing money

to get a income tax write-off is beneficial. It would only work if the write-off gain is greater than the stock loss which is not the case in any tax regime I'm familiar with.

[IronLionZion]

10. I hope MAGA morons go for the short squeeze like Game Stop

I encourage all MAGA to go all in on DJT to show their support. Raid the retirement fund, savings, reverse mortgage the house, bet the farm. Own the libs.

I encourage liberals to steer clear of this and not even try to mess with it. Let MAGA and big finance fight it out. This is NOT Game Stop. There is a ceiling on Trump supporters and they likely hit it already.

[machoneman]

22. I like your thinking. Yes, let them spend every dollar right into personal bankruptcy. Yeah, show them libs! Hah!

[OnlinePoker]

13. As I type this, DJT's at $46.49, down from a high of over $71 on the first day of trading. n/t

[WarGamer]

18. and $17 start of year

[WarGamer]

17. Must be the Fashion editor at the NYT talking finance...

https://www.barrons.com/articles/djt-stock-price-trump-media-truth-social-short-interest-e6ce3e1b

DJT Stock Keeps Sliding, but Short Sellers Aren’t Winning

“DJT borrow supply is extremely limited due to the composition of long retail holders not in traditional lending programs,” said Ihor Dusaniwsky, S3 Partners managing director of predictive analytics, in an email.

The cost to borrow stock is exorbitant due to the scarcity factor.

Steve Sosnick, chief strategist with Interactive Brokers said his firm’s stock loan team is currently quoting a borrowing rate of more than 800%. That is up from last-week’s fee of 150% to 250%. To put that in context, the typical cost to borrow fee for a stock is around 0.6%, according to S3 Partners.

“This implies that the stock will be more than worthless within a matter of months,” Sosnick said in an email, adding that even the biggest bears don’t actually think that can occur.

[Scruffy1]

31. I mentioned this last week in a post.

I had no news to go on, but experience. in the OTC market back when I was young with a "hot" company that was later exposed as a fraud. When you don't have institutional investors the tendency of many of these OTC stocks are largely to be largely over valued for quite a while then to eventually fade away. The real danger of shorting this crap is that if some of the "investors" come in and buy more, a short squeeze could drive the market up for a while. The psychology of small investors is often not logical from the viewpoint of large investors. It's often more like going to the casino. You place a bet on a company and if it loses, oh well, and they might hold it until it goes "teats up". My personal feeling is that it will crash to book value, but not until after the election . We already know that the majority of the investors are crazy and motivated by their belief in Trump, so I wouldn't touch any of this shit with a ten foot poll.

[prodigitalson]

19. anyone who shorted this thing when it got up to like 70 is gonna make a killing when it get under 10

and it will

[BradBo]

20. I bet Trump is screaming at the board to give him all his billions now.

He knows hes gonna get nothing if they wait.

[kimbutgar]

29. If I still invested in the stock market I would have shorted the shit out of that stock.

But you have borrow shares from a buyer to short and as previous posters have noted the cost of borrowing would eat into your profit when you covered the short plus interest from the brokerage firm,

[4lbs]

30. I will laugh my butt off when it falls below the IPO price. That would mean

financially, another "loser" for Dumpy the Clown.

Are we winning yet? I'm not yet tired.