Former President Donald Trump’s social media company appears to be weathering the rough waters of the stock market, with its stock holding steady despite concerns from short sellers that the stock could fall.
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Shares of Trump Media & Technology Group (TMTG), which operates the Truth Social platform as a major asset, remain higher than their April lows after the company sought to end short sales that involved borrowing. . Selling a stock on the open market when you think its price will fall and then buying the same stock back later at a lower price.
Trump owns almost 60% of TMTG. After initially rising, the company’s stock price rose earlier this year when shareholders of existing shell company Digital World Acquisition Corporation agreed to merge with TMTG, paving the way for the former president’s company to go public. It fell.
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When the combined group debuted on the stock market under the ticker DJT on March 26, its stock price soared above $78 and closed its first day of trading at $57.99, valuing the company at $11 billion. Ta. The combined group’s per share value reached $71.90 on March 27, before the income statement was released.
After that, the company’s stock price fell. According to his Google Finance data on April 17, each share was worth $22.84. That’s the lowest price since January 16, just three months ago, when the stock was $22.35, slightly higher than it was before the merger with President Trump’s Truth Social.
On April 15, President Trump filed a document with the Securities and Exchange Commission (SEC) meaning that some investors could sell their company’s stock, pending SEC approval, and one analyst said people would be able to sell their company’s stock pending SEC approval. suggests that it be sold.
In an apparent effort to avoid this, TMTG issued a press release on April 29 highlighting steps shareholders can take to prevent brokerages from lending out their shares for short selling purposes. The release also includes a sample email that shareholders can send to their brokers to opt out of the securities lending program.
Devin Nunes, the company’s CEO and former Republican congressman from California, also sent a letter to Adena Friedman, head of Nasdaq, raising concerns about short selling.
“DJT is listed on Nasdaq’s ‘Reg SHO Threshold List,’ which indicates illegal trading activity,” the letter, published Friday in an SEC filing, said. “This is particularly problematic given that ‘naked’ short selling often involves sophisticated market participants profiting at the expense of retail investors.”
A naked short is a form of investment that does not involve pledging or borrowing the stocks being bet on. It is prohibited because it can artificially distort market supply and stimulate volatility.
Since then, the stock price has risen some, peaking at $41.54 per share on April 29, according to Google Finance data.
As of May 3, the latest available Google Finance data shows $48.68 per share. It’s been a week since the stock fell below $45, indicating that the company’s approach appears to be working.
But Todd Landman, a professor of political science at the University of Nottingham’s School of Politics and International Relations, said stocks remained “volatile.”
“The stock price remained relatively volatile, rising sharply to $66.22 at the end of March and then falling to $22.84, but it rose steadily from April 16 onwards, reaching $48.68 by May 2,” he said. He has recovered.” “Therefore, prices have not recovered to late March prices, and a key question remains whether Mr. Trump will sell his shares in September, which could impact stock prices.”
A TMTG spokesperson said: Newsweek: “We will take all necessary measures to prevent retail investors from being taken advantage of,” he said.
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