The launch of Trump Media & Technology Group (DJT.O) has been a rollercoaster ride.
The company, which operates the Truth Social platform, saw its shares soar to great heights before experiencing a sharp decline.
This blog post examines the factors behind these fluctuations and their impact on former President Donald Trump’s net worth.
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- Trump Media’s stock experiences wild swings, soaring to a $9 billion valuation before tumbling.
- Donald Trump’s net worth fluctuates with stock performance, briefly earning him a spot on the Bloomberg Billionaire Index.
- Short sellers and options traders actively speculate on Trump Media’s future amid expectations of continued volatility.
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The Tumultuous Journey of Trump Media Stock
The Stock’s Wild Ride
Trump Media’s shares began trading on March 26 following a merger with the blank-check company Digital World Acquisition.
Despite initial setbacks and delays, the stock opened strongly, reaching $79.38 on its first day.
However, the euphoria was short-lived, and the shares have since tumbled to $32.41, representing a 54% decline from their opening price.
Trump’s Fluctuating Net Worth
As a majority shareholder in Trump Media, Donald Trump’s net worth has been directly affected by the stock’s performance.
At the peak of the stock’s value, Trump’s stake was worth more than $6 billion, propelling him onto the Bloomberg Billionaire Index for the first time.
However, as the stock price fell, so did his net worth, which now stands at approximately $2.6 billion.
Nonetheless, this windfall could prove timely as Trump appeals a $454 million civil fraud judgment against him.
Short Sellers and Stock Borrowing
Before Trump Media began trading under the “DJT” ticker, short sellers had targeted Digital World Acquisition, selling about 16% of its free float short.
This made it the most shorted Special Purpose Acquisition Company (SPAC) as of March 25.
Around 12% of the DJT free float is sold short, making it the most expensive stock to borrow among those with at least $50 million of short interest.
The difficulty in borrowing shares has limited the extent of short selling in the stock.
Options Trading and Divergent Opinions
Trump Media’s stock options have seen a flurry of activity, particularly in the first few days after their market debut.
The open contracts reveal a concentration of strike prices at both ends of the spectrum, from $2.5 put options to $100 call options.
This divergence in options trading reflects the differing opinions among traders about the stock’s prospects.
Steve Sosnick, chief strategist at Interactive Brokers, notes, “It seems safe to say the speculators – looking for big moves in either direction – are doing much of the trading.”
Expectations of Continued Volatility
Traders anticipate that Trump Media’s stock will remain volatile in the near future.
The company’s 30-day implied volatility, a measure of expected near-term stock swings, stands at 160%, indicating a roughly 10% daily price swing.
In comparison, the five most actively traded options names have an average 30-day implied volatility of about 44%.
The stock market journey of Trump Media & Technology Group has been a captivating tale of soaring highs and sharp declines.
The company’s valuation and Donald Trump’s net worth have been subject to the whims of market sentiment and trading activity.
As short sellers and options traders continue to speculate on the stock’s future, it remains to be seen where Trump Media’s shares will ultimately settle.
One thing, however, seems certain: the ride is far from over.
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