New York (AP) — In a surprising turn of events, a group of amateur investors has found success in betting against Donald Trump’s social media platform, Truth Social, despite a surge in buying from Trump supporters. These investors, driven by the poor financial performance of the company rather than personal feelings towards the former president, have collectively earned millions from their bearish bets.
One investor, Elle Stange, from Boise, Idaho, expressed skepticism about the company’s financial health, highlighting its lack of profitability compared to other businesses. Similarly, Seattle IT security specialist Jeff Cheung voiced certainty in the stock’s inevitable decline, emphasizing the fundamental weaknesses he perceives in Trump Media & Technology.
Since its initial public offering last month, Trump Media’s stock price has plummeted from $66.22 to $38.49, prompting investors who used puts and engaged in short selling to realize paper profits of over $200 million. While some amateur traders remain cautious due to the stock’s volatility, they continue to monitor its movements closely in hopes of maximizing their gains while destabilizing Trump’s financial holdings.
Despite facing occasional spikes in the stock price, these investors see their bets as a means of reducing the value of Trump’s stake in the company, potentially impacting his ability to fund legal expenses or future political endeavors. The audited financial reports of Trump Media reveal substantial losses and raise doubts about its sustainability, providing amateur traders like Manny Marotta from Cleveland with opportunities to profit from the stock’s downward trajectory.
Moreover, the exorbitant fee associated with short selling Trump Media’s stock has added to the risks faced by investors, potentially eroding profits even if the stock were to reach zero. Analysts warn of a possible “short squeeze” scenario, where a sharp rise in the stock price could trigger a flurry of buybacks by short sellers, further inflating prices and escalating losses.
Looking ahead, investors anticipate heightened volatility in DJT stock as lockdown agreements restricting the sale of shares by Trump and other executives expire in September. This impending flood of shares into the market poses a significant risk for the stock’s valuation, prompting traders like Seattle’s Cheung to maintain their bearish outlook on the company’s future.
Ultimately, while the complexities of trading DJT stock may deter some investors, alternative avenues for profiting off political fluctuations remain available through offshore betting platforms. As the fate of Trump’s media venture hangs in the balance, amateur traders continue to navigate the uncertainties of the market, finding both opportunity and risk in their contrarian positions.