The Trump Media & Technology Group, which trades under the former US president’s initials DJT, entered the market with a bang on 26 March 2024. It ended the day at 16% in the green with a $6.58bn market cap.
Trump Media & Technology Group Makes Mark With IPO
According to Yahoo Finance, Donald Trump’s share in the company could reach more than $4bn. Trump Media & Technology merged with a blank check company, Digital World Acquisition Corp., (DWAC), before going public. Based on S&P Capital IQ information, this special purpose acquisition company (SPAC) has been trading since 2021 and lost approximately $41m in the past two years.
Analysts are viewing DJT as a meme stock that is generating investor interest because of the hype surrounding Trump and ardent support for his ‘Make America Great Again’ campaign. Data further shows that many investors were individuals loyal to Trump. Some experts do not put much stock in DJT’s first-day trading and believe that the undertaking will eventually prove fruitless.
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In an email, Ihor Dusaniwsky, managing director at S3 Partners, wrote:
There is huuuuge conviction (Trump pun intended) that there will be a significant decline in the stock price in the short term.
S3 Partners reportedly believes that the interest in DJT is not sustainable, and the price will likely fall. Short interest can go up to 40% or more, though the average ranges between 3% and 4%. There are too few DJT shares available to push short trading.
Dusaniwsky confirmed this and commented:
There is very little stock available to support new short sales. But short sellers are staying in this trade even while paying over 200 times the average stock borrow rate for a US short trade.
