The Trump Media & Technology Group (TMTG) stock, which trades under the ticker $DJT, continued its upward momentum from yesterday by creeping up towards $50 a share. The momentary uptick has Trump fans who are holding the stock gleeful about the prospect of defeating short sellers—traders who are betting that the stock goes down.
“Panic time for shorty. Just imagine the questioning of their entire existence going on now. The regret of allowing their hatred of Trump to drive them to financial ruin,” posted @MarkYounan1 on Truth Social, the TMTG owned social media platform. “Endless sleepless nights. Extreme stress. Panic attacks. Be angry. Die angry. F. Em.”
Trump fans holding the stock have been at war with short sellers, who they believe are behind the precipitous drop in the stock since it went public at the end of March at around $66 a share. By the middle of April, it was just under $23 per share, but has been rallying back upward since.
Investors, many of whom see buying the stock as a way to invest personally in Trump’s prospects, have blamed short sellers for driving much of the stock’s movement. Trump Media CEO Devin Nunes sent a letter to Nasdaq recently accusing traders of manipulating the stock price by practicing “naked short selling.”
When traders short a stock, they borrow shares of a stock at one price and then sell it on the open market. Since they’re betting that the stock price goes down, they’re hoping they’ll be able to buy the stock back at a price below the one they sold it at. “Naked short selling” happens when traders sell the stock without actually officially borrowing it yet, and is usually illegal. Nunes has asked Congress to investigate the possibility that naked short selling is happening.
According to an Associated Press report, many short sellers have been “mostly amateur Wall Street investors,” and they’ve made tens of millions of dollars over the past month through shorting.
But for Trump fans, the worm is close to turning. And the recent rise of the stock price means that a squeeze might be coming for the short sellers.
“I would describe this squeeze to be more like an anaconda slow and methodical while the victim is unaware until it’s too late,” posted @jeffbayou in the $DJT group on Truth Social on Tuesday. “Then we really pop!”
A squeeze happens when a shorted stock unexpectedly rises in value, forcing buys from defeated short sellers—now forced to purchase at the higher prices and potentially lose their shirt. They can’t simply hold onto the stock because of the extremely high interest fees necessary for borrowing the stocks, and the panicked sell-offs can in turn push the stock higher, making losses even more painful for short selling traders.
“[S]horting a stock leaves an investor open to the possibility of unlimited losses, since a stock can theoretically keep rising indefinitely,” summarizes an informational summary of short selling regulation by the Securities and Exchange Commission.
That’s exactly what some $DJT holders are hoping for now.
“Ouch. Betting against DJT because of your TDS… Would I be a bad person for thinking this is funny?” asked @LetsGoBrandon45, pointing to a screenshot of a post from the r/wallstreetbets subreddit where one poster said he was closing his short position after big losses. “Or should I feel bad because they have been brainwashed into hating the best President ever? Regardless, the shorts are getting torched. And they keep doubling down!”
truthsocial.comAnother poster told a story about trading futures in the 90s where he accidentally entered an extra 0 on a contract before the market started moving against him. Luckily for him, his broker realized what happened and didn’t send the order through because of insufficient funds, though he still remembered the heart-jumping-into-his-throat feeling of it.
“THAT is what SHARTS are going through right now on a moment to moment basis, except for them it’s REAL!” he finished. “IN SHART, THEY HAVE EARNED THIS!”
Some posters are also warning the short sellers to get out now, citing multiple scenarios from Trump losing the election, to him being found guilty, to winning the election, to locking him up, all of which result in the stock popping.
“Wake up shorts they are leading you to a potential slaughter,” posted @PeteG. “NOT FINANCIAL ADVICE[.]”
Given the volatility of the market, it remains unclear whether Trump’s supporters bet will pay off in the end.
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