DJT has fallen 47 per cent this month, wiping out nearly half of its market value. You know, on March 26th, DJT shares were close to $80, and their market capitalization broke through the $9.5 billion mark.
The share price of "Trump's purest concept stock" DJT is becoming more and more exaggerated.
Fell by more than 8% on Wednesday.Crashremastered.5%, down about 5.4% on Thursday. U.S. stocks fell more than 8% within an hour of trading on Friday, falling below $30, lower than the social media company's IPO price of $70.90 on its first day of trading on March 26.CrashremasteredMore than 40 dollars.
Not only that, DJT has fallen 47% this month, wiping out nearly half of its market value. You know, on March 26th, DJT shares were close to $80, and their market capitalization broke through the $9.5 billion mark.
Later, as of 00: 47 a.m. Beijing time on Saturday, DJT recovered some of its lost ground, narrowing its decline to 3.98% and returning its market capitalization to $4.254 billion.
DJT share price is out of line with fundamentals
Trump, the former US president and "understanding king", is the largest shareholder in Trump Media (Trump Media, stock code: DJT), with nearly 60 per cent of the shares, according to public information. The company is known as "Trump's purest concept stock" and owns the Truth Social social platform. Trump often posts on Truth Social.
However, the social media did not perform well. In 2023, Trump Media reported a net loss of $58 million on total revenue of $4.1 million.
Some analysts pointed out that DJT is a typical "retail concept stock". For speculative purposes, retail investors go long and flatter the stock on social media, making it popular on social networks and attracting more retail investors to buy. Characterized by skyrocketing and plummeting, divorced from fundamentals.
Of course, the company's performance and relatively high share price attracted a lot of interest from short sellers, who bet on a fall in the company's share price by betting against it.
As of this week, DJT had short interest (short interest) of $208.7 million and short selling (shares shorted) of 5.44 million shares, according to Ihor Dusaniwsky, head of forecasting and analysis at S3 Partners. DJT currently has 136.7 million outstanding shares.
A week ago, traders trying to short DJT shares had to pay up to 900 per cent of their annual funding costs, according to Dusaniwsky. That means they need DJT to fall by $30 a share in a month to break even. Since then, however, the cost of financing DJT short trades has fallen sharply to 200 per cent.