Trump Media short sellers lost $420 million after betting against stock before blowout election victory
Short sellers who bet against Donald Trump’s media company have lost as much as $420 million in the six weeks leading up to Tuesday’s blowout election victory.S3 Partners, the financial analytics firm, released a report on Wednesday detailing how short sellers bet wrong as Trump Media and Technologies Group saw its shares surge by nearly 200% since late September.Trump Media, the parent company of the president-elect’s social media platform Truth Social, rose by 35% between Tuesday evening and Wednesday morning as the vote tallies made it apparent that the 45th president would be returning to the White House for a second term.The 78-year-old Trump soundly defeated his Democratic opponent, Vice President Kamala Harris — once again defying the odds and capping a political comeback that appeared inconceivable after his 2020 loss to Joe Biden.But the stock fell by more than 18% by the close of trading on Wednesday.Shares of the company were down by more than 11% in pre-market activity on Thursday.On Wednesday, the day Trump won the election, short sellers faced a loss of 14 million shares, at $5.50 per share, or $77 million, the report said.With its heightened volatility, short interest, lack of earnings and loyal following of retail investors, DJT “checks the boxes as a meme stock,” S3 said.S3 said the stock has become highly volatile and, due to reasons including significant interest by short sellers, a relatively small number of shares available for trading and substantial losses for short sellers, it is at risk of a “short squeeze.” That refers to a stock’s rapid rise forcing short sellers to buy back shares to cover their positions, further driving up the stock price. Trump Media & Technology Group operates Truth Social, a social media site and streaming service.
Trump himself is the company’s biggest shareholder.The stock’s fervent following of Trump supporters vow the same never-sell mentality, sometimes referred to as “diamond hands...