Investors betting against Trump Media & Technology Group (DJT) have lost a staggering $420 million as the stock surged leading up to and following Donald Trump’s victory in the 2024 U.S. presidential election. The financial analytics firm S3 Partners reported Wednesday that the company’s stock, which has been seen as a proxy for Trump’s election odds, has left short sellers nursing significant losses.
Republican Donald Trump, 78, reclaimed the White House on Wednesday, winning a decisive victory over Democratic candidate Kamala Harris. Since then, Trump Media shares have surged by 196% in the six weeks leading up to the election, reflecting investor sentiment and serving as an unofficial indicator of Trump’s re-election prospects.
S3’s report highlights that DJT, which operates the social media platform Truth Social and a streaming service, has exhibited the characteristics of a “meme stock,” akin to popular retail-driven stocks like GameStop and AMC. Trump Media’s loyal base of retail investors, many of whom are fervent Trump supporters, have adopted a “diamond hands” mentality, or a commitment to hold onto their shares despite market fluctuations, further fueling the stock’s momentum. This enthusiastic following has contributed to the stock’s extreme volatility and increased the difficulty for short sellers who aimed to profit by betting against its value.
On Tuesday night, DJT supporters gathered on video platform Rumble to monitor the election results, Trump’s election odds on betting platforms like Polymarket, and the company’s volatile share price. This gathering underscored how DJT’s stock performance has mirrored Trump’s political prospects, with the share price soaring each time his re-election seemed more probable. As Trump’s victory became apparent, short sellers were hit with substantial losses on the stock.
Trump Media’s rapid rise and unpredictability have led to several trading halts, particularly in the final week before the election, as volatility soared. S3 pointed out that these trading pauses were driven by the combination of limited available shares, heightened short interest, and speculative trading, making the stock vulnerable to a potential “short squeeze.” A short squeeze occurs when a stock’s price rises so sharply that short sellers are forced to buy shares to cover their positions, inadvertently pushing the price even higher.
Wednesday’s surge dealt short sellers a sharp blow, with S3 estimating losses on 14 million shares at approximately $5.50 per share, equating to $77 million. This post-election spike has placed DJT in a unique position for market participants, as it stands at the intersection of Trump’s political momentum and the fervent retail investor support characteristic of meme stocks.
“With a crowded short position and increased volatility, DJT remains a unique post-election focus for market participants,” S3 stated in its report. Analysts from S3 suggest that the stock could experience more stability as Trump prepares for his inauguration in January, though the lead-up could still hold surprises for investors.
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For Trump, who is the majority shareholder of Trump Media, the stock’s rise has been an unexpected financial boon. Since March, Trump’s personal stake in the company has grown, at times valued as high as $5.2 billion, according to Reuters calculations. Despite some fluctuations, on Wednesday alone, his stake was estimated to be worth $4.1 billion, positioning him as one of the biggest beneficiaries of his company’s election-linked stock surge.
Trump Media’s role as a barometer for Trump’s political prospects has drawn attention from analysts and retail investors alike, with its price movements closely monitored by supporters and critics. The firm’s connection to the president-elect has kept the stock in the spotlight, often correlating with betting odds on platforms such as Polymarket and Kalshi. Some experts believe DJT’s continued volatility could sustain as long as Trump remains a central figure in U.S. politics and media, underscoring the broader implications of intertwining political influence and financial markets.
For now, investors betting against DJT face steep losses, while supporters of Trump Media view the stock as a symbol of their commitment to Trump’s “America First” agenda. The saga underscores the shifting dynamics between politics, market sentiment, and retail investing, with DJT serving as a unique case study of how political outcomes can ripple through the financial world in unforeseen ways.
