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 person mislaid arsenic overmuch arsenic $420 cardinal successful nan six weeks starring up to Tuesday’s blowout predetermination victory.

S3 Partners, nan financial analytics firm, released a study connected Wednesday detailing really short sellers stake incorrect arsenic Trump Media and Technologies Group saw its shares surge by astir 200% since precocious September.

Trump Media, nan genitor institution of nan president-elect’s societal media level Truth Social, roseate by 35% betwixt Tuesday evening and Wednesday greeting arsenic nan ballot tallies made it evident that nan 45th president would beryllium returning to nan White House for a 2nd term.

The 78-year-old Trump soundly defeated his Democratic opponent, Vice President Kamala Harris — erstwhile again defying nan likelihood and capping a governmental comeback that appeared inconceivable aft his 2020 nonaccomplishment to Joe Biden.

But nan banal fell by much than 18% by nan adjacent of trading connected Wednesday. Shares of nan institution were down by much than 11% successful pre-market activity connected Thursday.

On Wednesday, nan time Trump won nan election, short sellers faced a nonaccomplishment of 14 cardinal shares, astatine $5.50 per share, aliases $77 million, nan study said.

With its heightened volatility, short interest, deficiency of net and loyal pursuing of unit investors, DJT “checks nan boxes arsenic a meme stock,” S3 said.

S3 said nan banal has go highly volatile and, owed to reasons including important liking by short sellers, a comparatively mini number of shares disposable for trading and important losses for short sellers, it is astatine consequence of a “short squeeze.”

That refers to a stock’s accelerated emergence forcing short sellers to bargain backmost shares to screen their positions, further driving up nan banal price. 

Trump Media & Technology Group operates Truth Social, a societal media tract and streaming service. Trump himself is nan company’s biggest shareholder.

The stock’s fervent pursuing of Trump supporters vow nan aforesaid never-sell mentality, sometimes referred to arsenic “diamond hands,” arsenic holders of cryptocurrencies.

On Tuesday night, hundreds of nan stock’s fans gathered successful an election-watch statement connected online video-sharing level Rumble. There, they toggled betwixt nan stock’s stock price, Trump’s likelihood connected nan predetermination gambling tract Polymarket and nan predetermination results. 

The week earlier nan election, trading of Trump Media shares was halted respective times arsenic nan shares surged up and down successful a chaotic frenzy. 

“With a crowded short position and accrued volatility, DJT remains a unsocial post-election attraction for marketplace participants,” nan study stated. 

The institution added that nan banal should normalize person to Trump’s inauguration successful January.  

The biggest beneficiary of nan stock’s ascent has been nan president-elect. Since March, Trump has seen his liking successful nan institution emergence arsenic precocious arsenic $5.2 billion, according to Reuters calculations.

On Wednesday it was worthy $4.1 billion.

The stock, alongside online gambling sites for illustration Polymarket and Kalshi, became thing of a proxy for Trump’s reelection chances.

In all, Polymarket gamblers spent much than $3.7 billion placing bets connected nan statesmanlike election.

An anonymous French bettor, who goes by Théo, pocketed a $48 cardinal profit aft wagering $30 cardinal that Trump would win.

With Post Wires