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WarGamer

(13,463 posts)
Tue Apr 9, 2024, 04:26 PM Apr 2024

Just wanted to fill in some detail about the trading of DJT.

Last edited Sun Apr 14, 2024, 08:44 PM - Edit history (1)

Seems to be a LOT of confusion about the stock and it's trading so... here I am.

To start, DJT is a tiny company.

It's split into 137 million tiny slices called SHARES.

Donald Trump owns 79 million shares... a few other co-founders hold a few million shares.

So, about 2/3 of the shares are held by insiders who can NOT sell for 6 months due to a lock up period.

Who else owns DJT?

Not institutions. Won't find Vanguard or CALPRS holding any of it.

Total institutional ownership is only 2.3 million shares.

Some of those institutions, call them hedge funds or small investment firms... hold them for the income earned by lending out the shares to folks who want to SHORT the stock.

So there's 4-6m in volume each day. Who's buying and selling?

It's mostly retail investors and small firms trading short term.

How is it being traded? And how does that affect the price action we've seen recently?

You see, if you buy 1000 shares at 35 dollars and it hits 45 dollars the next day, you've made $10k

Recently we saw it run up to nearly 80/share but that was a large enough number that people started to sell their positions to take the money. DJT started the year around 17/share and popped into the 30's when the merger vote date was announced.

Right now it's back to the 30's which seems to be an area of support. So now you will see firms buying in at 30 something and looking to sell when it rises by a few dollars... that's the volatility you see in meme stocks.

Speaking of meme stocks.

DJT has little to no value. Neither did Gamestop but Hedge Funds lost BILLIONS of dollars shorting it.

The retail investors, or as the pros call them "dumb money and ret&rds" are trading the stock "cause they like it" or they're just short term TRADERS making a buck.

The "shorts" you keep hearing about?

DJT actually only has around 11% short last I saw... not that much.

And since the VAST majority of shares are insider owned on lockup and most of the remaining shares are owned by TRADERS just looking for a buck...

There can't be an effective and powerful force to short the stock down.

Why did it go from 79 to 30?

Profit taking.

People will load back up when they see a support level.

I expect this see-saw to continue until the election. It will drop down to support levels and rise again until it's high enough for traders to take profit.

At one point or another we might see foreign buyers take positions... but I think we'll see those around dates like the GOP convention and formal nomination, etc...

To sum it all up. DJT is NOT META. No one is buying DJT as an investment. It's a TRADING commodity only at this point and the daily price action tells the story of who is buying and selling.

24 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Just wanted to fill in some detail about the trading of DJT. (Original Post) WarGamer Apr 2024 OP
Appreciate this explainer! Kick/Rec/Bookmark Drum Apr 2024 #1
thx for checking it out! WarGamer Apr 2024 #3
r mdmc Apr 2024 #9
A very good analysis. Thanks. GoneOffShore Apr 2024 #2
The greater fool theory applies here LetMyPeopleVote Apr 2024 #4
There will not be a "see saw" jcgoldie Apr 2024 #5
i guess we'll see... WarGamer Apr 2024 #6
Could Also Be A Stair-Step Decline ProfessorGAC Apr 2024 #10
I've been watching DWAC/DJT for a few years. WarGamer Apr 2024 #11
27 and falling like a rock jcgoldie Apr 2024 #15
agree FHRRK Apr 2024 #16
I am amused that anyone would invest in this stock LetMyPeopleVote Apr 2024 #7
Goth... no one is INVESTING in this stock... WarGamer Apr 2024 #8
So you are betting on their being a greater fool out there LetMyPeopleVote Apr 2024 #12
This message was self-deleted by its author WarGamer Apr 2024 #14
Plenty of traders are out there doing the same daily FHRRK Apr 2024 #17
Again, these "investors" or day traders are relying on the greater fool theory LetMyPeopleVote Apr 2024 #19
I'm with you FHRRK Apr 2024 #22
If you want to feel extra outraged... read this WarGamer Apr 2024 #13
I also saw that Nunes got a large "retention" bonus LetMyPeopleVote Apr 2024 #18
Isn't the price continuing to drop? Who knows what it'll be worth in 6 months. Kaleva Apr 2024 #20
The stock will continue to drop LetMyPeopleVote Apr 2024 #23
Trump Media Sinks 15% After Registering Shares, Warrants LetMyPeopleVote Apr 2024 #21
the mistake... is looking at this like a normal company/stock WarGamer Apr 2024 #24

LetMyPeopleVote

(149,463 posts)
4. The greater fool theory applies here
Sun Apr 14, 2024, 04:10 PM
Apr 2024

Meme stocks rely on the greater fool theory. I was amused to see that DWAC/Trump Media is classified as a meme stock where the value is due to personality and not due to the real value of issuer of the meme stock. This article is a good discussion of the meme nature of DWAC/TMT.
https://www.vanityfair.com/news/donald-trump-truth-social-media-merger

Trump’s financial future now hinges on some of the strangest fads in corporate finance—meme stocks, SPAC deals, and cult-of-personality investing. If Trump can find a way to act fast, it might just be the bailout he desperately needs.

Truth Social is a bad imitation of Twitter, where Trump was an unavoidable presence long before he ran for president. It’s chock full of stale red-pilled memes, MAGA conspiracy theories, and of course, Trump. That’s the main draw. Truth Social is the only place the former president now regularly posts his unfettered thoughts......

DWAC is best thought of as a meme stock. You may remember the meme stock fad from when retail investors on Reddit successfully coordinated a short squeeze with GameStop stock, before glomming onto a series of other millennial nostalgia brands like AMC Entertainment, BlackBerry, and Bed Bath & Beyond. Meme stocks are often publicly traded companies that attract an inordinate percentage of individual investors and their stock performance fluctuates in a way that’s significantly divorced from the reality of their underlying business. Combine those two trends and you’ll start to see why Trump’s media company could be valued at roughly $9 billion if it merges with DWAC.

Jay Ritter, a finance professor at the University of Florida, says meme stocks often depend on the “greater fool theory of investing,” meaning rational investors might buy in expecting the stock price to rise and betting that they can sell their shares to a greater fool willing to buy them at a higher price. In this case, however, Ritter speculates there is an inordinate number of individual retail investors compared to institutional investors, such as hedge funds, that normally own SPAC shares prior to a merger. “Here you’ve got ideology involved [too]—as far as I can tell, the vast majority of DWAC investors are Trump political investors, and they’re to some degree putting their money where their mouth is… My suspicion is most of them have bought the stock as a show of political support.” In this way, Trump is conducting yet another public fundraising from his supporters—this time through the public markets.

Idiots who purchase meme stocks are betting that they can get out before the other idiots figure out that the stock is worthless

ProfessorGAC

(66,914 posts)
10. Could Also Be A Stair-Step Decline
Sun Apr 14, 2024, 08:47 PM
Apr 2024

So, another option could be bouncing ball where each bounce is lower than the last.
It's hard to define a value equilibrium when there's no underlying value.
As you said, we shall see.

WarGamer

(13,463 posts)
11. I've been watching DWAC/DJT for a few years.
Sun Apr 14, 2024, 08:51 PM
Apr 2024

It moves on Trump related news.

It will move up and down based on Trump related news like the GOP Convention.

If Trump were to win in November... I can see all time high.

DJT will serve as a slush fund accessible to the world's "investors" who want to own a piece of Trump, if you know what I mean.

If he loses... the stock is literally worthless because Trump himself becomes worthless.

But from now til November... the stock will bounce around.

Don't forget, the vast number of shares are owned by founders, the float is small.

jcgoldie

(11,707 posts)
15. 27 and falling like a rock
Mon Apr 15, 2024, 10:14 AM
Apr 2024

Its being propped up by rubes trying to support Trump.

Sort of like a see saw with a huge orange fat man sitting on one end...

LetMyPeopleVote

(149,463 posts)
7. I am amused that anyone would invest in this stock
Sun Apr 14, 2024, 08:39 PM
Apr 2024

Only an idiot would invest in this company

The only way to make money is to help that there other idiots who buy one's position, i.e., the greater fool theory

LetMyPeopleVote

(149,463 posts)
12. So you are betting on their being a greater fool out there
Sun Apr 14, 2024, 08:53 PM
Apr 2024

I live in a world where we rely on financial statements and something called earnings. You are hoping to make money by relying on idiots who are too stupid to realize that there is no value to this stock

Response to LetMyPeopleVote (Reply #12)

FHRRK

(754 posts)
17. Plenty of traders are out there doing the same daily
Mon Apr 15, 2024, 10:23 AM
Apr 2024

Looking to make profits on price swings of $3 to $5. Look for a base, let's say $30 for the week, it drops to $30 and they bet it will swing back up to $33 or $35 and then they sell.

LetMyPeopleVote

(149,463 posts)
19. Again, these "investors" or day traders are relying on the greater fool theory
Mon Apr 15, 2024, 11:03 AM
Apr 2024

I am enjoying laughing at these idiots


WarGamer

(13,463 posts)
13. If you want to feel extra outraged... read this
Sun Apr 14, 2024, 08:53 PM
Apr 2024
https://www.dailykos.com/stories/2024/4/14/2235281/-Trump-could-potentially-earn-yuuuge-stock-bonus-even-as-Truth-Social-stock-gets-pulverized?utm_campaign=recent

Surprised no one mentioned this yet, but at the close of business this past week, another part of the false narrative that has been spun around Donald Trump got exposed. As we all know, for the better part of the last eight years, we’ve been told that Trump got into politics to save the country, and is fighting for the average man. Time and again, it’s been proven that he is the embodiment of the entitled one-percenter, and is solely out for himself.

Well, another part of that fraud got exposed by Brett Arends of MarketWatch. He couldn’t help but notice that even though the stock of Truth Social’s parent company has been absolutely pulverized in the four weeks since it began trading on NASDAQ, Trump is poised to make out like a bandit. Even though Trump Media and Technology Group stock price and market cap have been almost halved since it began trading, Trump is currently due to earn a massive stock bonus. At current prices, that bonus could be worth as much as $1 billion.

LetMyPeopleVote

(149,463 posts)
18. I also saw that Nunes got a large "retention" bonus
Mon Apr 15, 2024, 11:01 AM
Apr 2024

BTW, I am NOT outraged at this company. I am amused that there are people stupid enough to throw their money away.


LetMyPeopleVote

(149,463 posts)
21. Trump Media Sinks 15% After Registering Shares, Warrants
Mon Apr 15, 2024, 11:12 AM
Apr 2024

Trump Media has filed a registration statement with the SEC to help current holders sell their stock and warrants.



https://finance.yahoo.com/news/trump-media-plunges-registering-shares-130049015.html

Donald Trump’s social media startup tumbled on Monday, extending a two-week slump, after the company took a first step toward allowing the former president and other insiders to capitalize on their stakes.

Trump Media & Technology Group Corp., parent of Truth Social, filed to register shares, including those linked to warrants. The move could ultimately bring forward sales from insiders that are currently not permitted until September.

Shares slumped 15% to $27.83 as of 9:50 a.m. in New York, the lowest level since January. Warrants, which are tied to the stock and can be exchanged with cash for shares of the company, sank 6.9% to $12.75. The company has had its market value slashed by more than $5 billion from a peak after debuting in March.

The slump means the paper windfall for the former president has dropped to $2.3 billion from more than $5 billion in a matter of weeks. However, if the stock can hold above the $17.50 mark, Trump and insiders would be in line to get another 40 million shares to divvy up. Even after the latest slide, that so-called earnout would be worth $1.2 billion.

The company registered as many as 146 million common shares, as well as up to 21 million shares that are issuable upon the exercise of warrants. The filing also registered up to 4 million warrants to purchase common stock. All securities being registered are either held by or underlie securities held by existing holders of Trump Media.

The Form S-1 is amazing. See https://www.sec.gov/ix?doc=/Archives/edgar/data/1849635/000114036124019745/ny20026576x1_s1.htm
This filing is going to further dilute the public shareholders in a very thinly traded stock



The stock has been as low as $26.83 today.

I am looking forward to reading the Form s-1 and 50 pages of risk factors. This will be fun to watch

WarGamer

(13,463 posts)
24. the mistake... is looking at this like a normal company/stock
Mon Apr 15, 2024, 11:52 AM
Apr 2024

There is absolutely NO reason to invest in this company.

The financials are garbage, earnings and future is dubious.

However... it will still be TRADED.

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