Trump Media & Technology Group stock (DJT) soared more than 25% on Thursday as the company sought to fend off short sellers amid a volatile trading week.
According to an updated FAQ page on Trump Media's website, which was also included in a new securities filing posted Wednesday, the company is investing information on how to prevent its stock from being loaned out for short positions. Advice to the family.
Short interest in DJT stock (bets that the stock price will fall rather than rise) is about 13% of outstanding shares, according to the latest data from S3 Partners. This is up from about 11% on its public market debut. The average short interest for public companies ranges from 3% to 4%.
Late last month, with shareholder approval, Trump Media merged with special purpose acquisition company Digital World Acquisition Corporation and listed on the Nasdaq. The stock price has fallen about 55% since the end of March.
“To prevent shares from being loaned out for short selling positions, please contact your brokerage firm to place limits on lending your shares to short sellers,” the company said in a filing.
Trump Media provided a sample letter for investors to send to brokers advising them to “opt out of any securities lending program.” The company also advised investors to hold DJT shares in brokerage cash accounts rather than margin accounts and to transfer shares to banks for holding in retirement accounts.
The advice to prevent short selling comes after stocks tumbled earlier in the week. The company filed for issuance of more than 21 million shares on Monday. The next day, the company announced a new live TV streaming platform.
Trump maintains about a 60% stake in Truth Social. At current levels of about $30 per share, Trump Media has a market capitalization of about $4 billion, and the former president's stock holdings are worth about $2.4 billion. Shortly after the company's public debut, Trump's stake was valued at just over $4.5 billion.
After being banned from major social media apps such as Facebook (META) and Twitter (the platform now known as Established. Trump has since returned to those platforms.
Trump Media reported a net loss of nearly $60 million for the year ending Dec. 31 on revenue of just over $4 million, according to its latest regulatory filing released earlier this month. did. The company warned that it expects losses to continue as profitability challenges grow.
The filing also confirmed that interested parties will continue to be subject to a six-month lock-up period before any sale or transfer of shares. The only exception to the lock-up period is if the company's board of directors resolves to implement special measures. While possible, experts told Yahoo Finance last month that the effort would likely result in multiple lawsuits on behalf of public shareholders.
Trump faces a $454 million fraud fine and a campaign funding shortfall as he prepares to run against Biden in the 2024 election.
President Trump recently posted $175 million bail in the fraud case, and the final payment will be withheld while he appeals the verdict.
He is also facing criminal charges related to alleged payments to adult film star Stormy Daniels.
alexandra canal I'm a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, Email alexandra.canal@yahoofinance.com.
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