Short sellers betting against Donald Trump’s media company have lost as much as $420 million in the six weeks leading up to Tuesday’s election victory.
S3 Partners, the financial analytics firm, released a report Wednesday detailing how short sellers bet wrong after Trump Media and 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 night and Wednesday morning as vote counts made it clear the 45th president would returned 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 seemed unthinkable after his 2020 loss to Joe Biden.
But the stock fell more than 18% by the close of trading on Wednesday. Shares of the company fell more than 11% in premarket activity on Thursday.
On Wednesday, the day Trump won the election, short sellers faced a loss of 14 million shares, at $5.50 a 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 very volatile and, for reasons that include significant interest from short sellers, a relatively small number of shares available for trading and significant losses for short sellers, it is at risk of a “squeeze short”.
This refers to the rapid rise in a stock that forces short sellers to buy stock to cover their positions, further increasing the stock price.
Trump Media & Technology Group operates Truth Social, a social media site and streaming service. Trump himself is the company’s largest shareholder.
Trump’s fervent pursuit of stocks pledges the same no-sell mentality, sometimes referred to as “diamond hands,” as cryptocurrency holders.
On Tuesday night, hundreds of stock fans gathered for an election watch party on the online video sharing platform Rumble. There, they switched between the share price of the stock, Trump’s odds on the Polymarket gambling site and the election results.
A week before the election, trading in Trump Media stock was halted several times as the stock surged up and down in a chaotic frenzy.
“With a short short position and increased volatility, DJT remains a unique post-election focus for market participants,” the report said.
The company added that shares should normalize closer to Trump’s inauguration in January.
The biggest beneficiary of the stock rally has been the president-elect. Since March, Trump has seen his stake in the company rise to as much as $5.2 billion, according to Reuters calculations.
On Wednesday it was worth $4.1 billion.
The stock, along with online gambling sites like Polymarket and Kalshi, became something of a proxy for Trump’s re-election chances.
In total, Polymarket players spent more than $3.7 billion placing bets on the presidential election.
An anonymous French bettor, who goes by the name Théo, won $48 million after betting $30 million that Trump would win.
By postal wire
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