short seller who Bet against Donald Trump’s media company It has lost more than $420 million in the preceding six weeks Tuesday’s resounding election victory.
Financial analytics firm S3 Partners released a report on Wednesday detailing how short sellers made the wrong bet as Trump Media & Technologies Group saw its shares rise nearly 200% since late September.
Trump Media, the parent company of the president-elect’s social media platform Truth Social, surged 35% between Tuesday evening and Wednesday morning as vote tallies made it clear the 45th president would return to the White House for a second term.
78-year-old Trump defeated his Democratic rival badly. Vice President Kamala Harris – defying the odds once again possibility of political comeback This seemed impossible after his loss to Joe Biden in 2020.
But the stock fell more than 18% by the close of trading on Wednesday. The company’s shares fell by more than 11% in pre-market activity on Thursday.
On Wednesday, the day Trump won the election, short sellers lost 14 million shares, a loss of $5.50 per share, or $77 million, the report said.
with increased volatilityWith low interest, a lack of earnings and a loyal following of retail investors, DJT “checks the boxes as a meme stock,” S3 said.
S3 said the stock has become highly volatile and, for reasons including significant interest by short sellers, the relatively small number of shares available for trading and substantial losses for short sellers, it is at risk of a “short squeeze”.
This refers to a sharp rise in a stock’s price that forces short sellers to buy back shares to cover their positions, causing the stock’s price to rise further.
Trump Media and Technology Group operates Truth Social, a social media site and streaming service. Trump himself is the company’s largest shareholder.
The enthusiasm for stocks pledges a never-sell mentality from Trump supporters, who are sometimes referred to as “diamond hands” as cryptocurrency holders.
On Tuesday night, hundreds of stock fans gathered for an election-watching party on the online video-sharing platform Rumble. There, they oscillated between the stock’s share price, Trump’s odds on the election gambling site Polymarket, and the election results.
A week before the election, trading in shares of Trump Media was halted several times as shares went up and down in a chaotic frenzy.
“With crowded short positions and increased volatility, DJT remains a unique focus for market participants post-election,” the report said.
The company said stock should return to normal around Trump’s inauguration in January.
The biggest beneficiary of stock gains has been the president-elect. Since March, Trump has increased his stake in the company to $5.2 billion, according to Reuters calculations.
Its value on Wednesday was $4.1 billion.
Stocks, along with online gambling sites like Polymarket and Kalshi, became a proxy for Trump’s re-election chances.
in all, Polymarket gamblers spent more than $3.7 billion Betting on the presidential election.
An unidentified French bookmaker, called Theo, made a $48 million profit after betting $30 million on a Trump victory.
with post wire
