Trump Media and Technology Group (TMTG) has intensified its efforts to combat short-sellers, triggering a surge in its stock price and igniting a short-squeeze. The parent company of Donald Trump’s Truth Social platform released a press release on Monday, advising retail investors on how to recall shares from short-sellers.
“TMTG wants to clarify that if shares are currently on loan by brokerage firms to facilitate short selling, shareholders have the option of asking their broker to recall their shares,” the company stated in the press release.
After recalling their shares, long-term shareholders who believe in the Company’s future can then hold their DJT shares in a cash account, opt out of any securities lending programs, or move their shares to a Direct Registration account at the Company’s transfer agent,” the company continued.
The announcement resulted in a 12% surge in Trump Media’s shares on Monday, followed by an additional 9% increase on Tuesday. Since the company posted a message on its website about retail investors pressuring short-sellers by preventing shares from being loaned out for short-interest positions, the stock has climbed a remarkable 92%.
Should retail investors follow through with instructing their brokerages not to loan their shares to short-sellers, it would significantly raise the interest rate charged to bearish investors who sell the stock short. With fewer shares available for short-selling, short-sellers could face a squeeze if the stock fails to trend lower quickly.
Since going public last month, Trump Media has become a target for short-sellers, largely due to its $58 million in losses on just $4 million in revenue last year. With a valuation exceeding $6 billion, many investors view the stock as vastly overvalued.
Recent short-interest data reveals that nearly 6 million shares of Trump Media are sold short, accounting for approximately 8% of the company’s share float.
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