Trump Media & Technology Group (DJT) stock jumped more than 25% on Thursday as the company tried to fend off short sellers amid a volatile trading week.
According to an updated FAQ page on Trump Media’s website, which is also included in a new securities filing released Wednesday, the company advises investors on ways to prevent their shares from being loaned out for shorting. term.
Short interest in DJT stock — bets that the stock price will fall rather than rise — accounts for about 13% of shares outstanding, according to the latest data from S3 Partners. That’s up from about 11% when it debuted on the public market. The average short interest in public companies is between 3% and 4%.
Trump Media went public on Nasdaq after merging with special purpose acquisition company Digital World Acquisition Corp. under a deal approved by shareholders late last month. Shares are down about 55% since the end of March.
“To prevent shares from being loaned for a short interest position, contact your brokerage to place restrictions on lending your shares to short sellers,” the company said in its filing.
Trump Media provided a sample letter that investors can send to their brokers and advised them to “opt out of any securities lending programs.” The company also advised investors to hold their DJT shares in a cash account with a brokerage firm instead of a margin account and to transfer the shares to a bank for safekeeping in a retirement account.
The short-selling prevention tips come as stocks fell earlier this week. On Monday, the company filed to issue more than 21 million shares. A day later, it announced a new live TV streaming platform.
Trump retains a roughly 60% stake in Truth Social. At current levels of around $30 per share, Trump Media has a market capitalization of around $4 billion, giving the former president a stake worth around $2.4 billion. Just after the company’s public debut, Trump’s stake was worth just over $4.5 billion.
The former president founded Truth Social after being kicked off major social media apps like Facebook (META) and Twitter, the platform now known as X, following the Capitol riots on January 6, 2021. Trump has since been reinstated on these platforms.
According to an updated regulatory filing released earlier this month, Trump Media reported sales of just over $4 million, while net losses reached nearly $60 million for the full fiscal year. ending December 31. The company warned that it expects losses to continue amid greater profitability challenges.
The filing also confirmed that stakeholders are still subject to a six-month lock-up period before selling or transferring shares. The only exception to the lock-up period would be if the company’s board of directors votes in favor of a special exemption. While possible, experts told Yahoo Finance last month that the attempt would likely result in multiple lawsuits from public shareholders.
Trump faces a $454 million fine for fraud and a fundraising shortfall for his campaign ahead of his 2024 election rematch against Biden.
Trump recently posted $175 million bail in the fraud case, which puts final payment on hold until he appeals the verdict.
He also faces a criminal trial related to alleged payments to adult film star Stormy Daniels.
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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