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Trump Media scrambles to stop short sellers from tanking share prices
Trump Media and Technology Group, the parent company of Truth Social, is scrambling to stop short sellers from tanking its share values.
NBC News reports that Trump Media this week sent around suggestions to shareholders to prevent their shares in the company from winding up in the hands of short sellers who are essentially betting on the company's failure to make money.
According to NBC, the "tips include holding DJT shares in a cash account at a brokerage firm as opposed to a margin account, 'opting out of any securities lending program,' moving Trump Media shares to the company’s designated transfer agent, and transferring shares to a bank and 'holding them in your retirement account.'"
Short sellers essentially pay brokerage firms fees to borrow shares on a temporary basis on the belief that the shares will sink in price.
READ MORE: From 'really rich' to begging: Inside Trump's U-turn on one of his first campaign lies
After borrowing the shares, the short sellers proceed to sell them on the open market and then by them back by a specific date when they have to be returned to their owners.
If the share price in that time has indeed gone down, then the short sellers pocket the difference they made between the original sale and the repurchase.
If the share price increases, however, the short sellers lose money because they'll be buying back the shares at a higher price than the original sale.
Short sellers have swarmed to Trump Media shares for weeks now, as its price has plummeted from a high of $66.22 on March 27th to a low of $22.84 on Tuesday, although its price has recovered some of that lost value in the last day-and-a-half of trading.
The longer-term threat to Trump Media's value likely isn't short sellers, however, but simply a lack of profitability. The selloff in shares started earlier this month when the company released an earnings report showing that it lost $58 million in the last fiscal year while generating just $4 million in revenues.
Lara Trump downplays hush money charges as simple ‘bookkeeping error’
Lara Trump downplayed the criminal charges against her father-in-law Donald Trump as a mere "bookkeeping error."
The Republican National Committee co-chair appeared Wednesday on Sean Hannity's Fox News program, where she suggested Manhattan prosecutors were engaged in election interference for trying the former president on 34 counts of falsifying business records to cover up alleged hush money payments to adult movie actress Stormy Daniels, reported HuffPost.
"Everyone can see what this is about," Lara Trump said. "They have, and are forcing, Donald Trump to sit in a courtroom — this is a former president of the United States, the current nominee for the Republican side of the aisle for president — for weeks on end. For what, Sean? They claim a bookkeeping error — really?"
“This is insane," she added. "We can all see exactly what this is all about and what the goal of this is. Of course, it’s to keep Donald Trump from the campaign trail."
Prosecutors allege in their indictment that Trump directed his then-attorney Michael Cohen, who has already served nearly three years in prison after pleading guilty in the scheme, to pay Daniels off in the weeks before the 2016 election to ensure her silence about an extramarital affair.
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Trump then allegedly falsified business records by reimbursing Cohen in a series of transactions described as payment for legal services.
Trump has denied all the allegations.
The ex-president's campaign circulated talking points ahead of the trial, which started Monday, directing surrogates to describe the case as a "a full-frontal assault on American Democracy and the Constitution" and a "witch hunt," and recommending that supporters do not refer to the case as a "hush money case," but to instead describe it as "entries in the company’s records."
