Trump Media Stock Continues Plummet as Short-Selling Surges

Trump Media Stock Continues Plummet as Short-Selling Surges

Trump Media stock, trading under the ticker DJT, has witnessed a stark decline, erasing all gains made since its debut last month.

Closing down over 8% on Wednesday at $37.47, the Trump Media stock (NASDAQ: DJT) has experienced a rapid 45% decrease in just 14 days from its high of $79 a share on March 26. Analysts attribute this tumultuous trajectory to the prevalence of short-selling, with approximately 12% of available shares reflecting traders’ bets on further price declines.

Short-selling, a practice where investors bet against a stock’s performance, has dominated much of the trading activity surrounding Trump Media. Ihor Dusaniwsky, Managing Director at S3 Partners, highlights the high ratio of short positions, indicating a pervasive sentiment among traders regarding the Trump Media stock’s downward trajectory. While some seek to profit from continued price drops, others aim to capitalize on potential short squeezes, betting on events that could drive the share price upward.

Trump’s Net Worth Tumbles Amid Trump Media’s Financial Uncertainty

Former President Donald Trump, who owns a majority stake in Trump Media Group, has seen his net worth plummet in tandem with the Trump Media stock decline. From a peak of approximately $5.2 billion, Trump’s net worth has dwindled to around $2.9 billion. However, contractual restrictions prevent Trump from selling or leveraging his shares for six months.

Despite Trump’s reassurances about the company’s stability on Truth Social, criticisms persist regarding its financial health and audience reach. Trump Media reported a substantial loss of $58.2 million last year, with no disclosed user metrics. Furthermore, the company’s auditor, BF Borgers CPA PC, issued a “going concern” notice, casting doubt on its ability to remain solvent. The auditor’s own credibility has come under scrutiny, as it is banned in Canada.

In response to mounting concerns, CEO Devin Nunes expressed confidence in the company’s future prospects. However, skepticism prevails amidst Trump Media’s ongoing financial turmoil and regulatory scrutiny.

Also read: Can SoFi Technologies Stock Make You Rich in 2024?

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