Rooting for Trump to fail has made his stock shorters millions

Pedestrians walk past the Nasdaq building on March 26, 2024, in New York with the stock price of Trump Media & Technology Group Corp., displayed on screens. (AP Photo)
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Updated 27 April 2024
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Rooting for Trump to fail has made his stock shorters millions

  • Wall Street investors have collectively make millions by betting that the stock price of Trump's social media business — Truth Social — will keep dropping despite massive buying by Trump loyalists

NEW YORK: Rooting for Donald Trump to fail has rarely been this profitable.

Just ask a hardy band of mostly amateur Wall Street investors who have collectively made tens of millions of dollars over the past month by betting that the stock price of his social media business — Truth Social — will keep dropping despite massive buying by Trump loyalists and wild swings that often mirror the candidate’s latest polls, court trials and outbursts on Truth Social itself.
Several of these investors interviewed by The Associated Press say their bearish gambles using “put” options and other trading tools are driven less by their personal feelings about the former president (most don’t like him) than their faith in the woeful underlying financials of a company that made less money last year than the average Wendy’s hamburger franchise.
“This company makes no money. ... It makes no sense,” said Boise, Idaho, ad executive Elle Stange, who estimates she’s made $1,300 betting against Trump Media & Technology stock. “He’s not as great a businessman as he thinks. A lot of his businesses go belly up, quickly.”
Says Seattle IT security specialist Jeff Cheung, “This is guaranteed to go to zero.”




The Truth social network logo is seen on a smartphone in front of a display of former US President Donald Trump in this picture illustration taken February 21, 2022. (REUTERS)

As of Friday’s close, a month since Trump Media’s initial public offering sent its stock to $66.22, it has dropped to $41.54. An AP analysis of data from research firms FactSet and S3 Partners shows that investors using puts and “short selling” have paper profits so far of at least $200 million, not including the costs of puts, which vary from trade to trade.
Still, amateur traders, mostly risking no more than a few thousand dollars each, say the stock is too volatile to declare victory yet. So they are cashing in a bit now, letting other bets ride and stealing a glance at the latest stock movements in the office cubicle, at the kitchen table or even on the toilet.
There have been plenty of scary moments, including last week when DJT, the ex-president’s initials and stock ticker, jumped nearly 40 percent in two days.
“I don’t know which direction the stock is going,” says Schenectady, N.Y., day trader Richard Persaud while checking his iPhone amid the surge. “It’s so unbelievably overvalued.”
Many who spoke to the AP say knowing their bets have helped slash the value of Trump’s 65 percent stake in half is an added political benefit. If some of their predictions are right, they may able to someday push it to zero, making it impossible for him to tap it to pay his hefty legal bills or finance his GOP presidential campaign.
They have a long way to go. Trump’s stake is still worth $4 billion.
Normally, investors betting a stock will fall, especially a gutsy breed of hedge fund traders called “short sellers,” will do plenty of homework. They’ll pore over financial statements, develop expertise in an industry, talk to competitors, and even turn to “forensic accountants” to find hidden weaknesses in the books.
No need in Trump Media’s case. It’s all there in the Sarasota, Florida-based company’s 100-page financial report: A firehose of losses, $58 million last year, on minuscule revenue of $4 million from advertising and other sources.
The losses are so big, as Trump Media’s auditor wrote in the report, they “raise substantial doubt about its ability to continue as a going concern.”
A short seller’s dream? Or is it a nightmare?
Amateur trader Manny Marotta has two computer screens at home, one for work, the other showing DJT stock’s movements where he can gauge how much he’s up or down.
It wasn’t looking so good earlier this week.




The stock price chart for the Trump Media and Technology Group on the NASDAQ website is seen on a computer screen in New York on April 19, 2024. (AP Photo)

The legal writer from suburban Cleveland had been up about $4,000 on “put” options purchased over the past few weeks. But the screen that morning was showing investors, presumably rich ones, buying large volumes of DJT shares, pushing up the stock once again.
“My options are worth less with every passing minute,” says Marotta, adding about DJT: “It’s being manipulated. It’s insane.”
Waiting for the stock to drop is especially painful to “short sellers,” who pay a fee to borrow shares owned by others. The idea is to quickly sell them on a hunch they will be able to buy the same number of them later for much cheaper before having to return them to the lender. That allows short sellers to pocket the difference, minus the fee, which is usually nominal.
In DJT’s case, the fee is anything but nominal.
It was costing 565 percent a year at one point earlier this month, meaning short sellers had only two months before any possible profits would be eaten up in fees, even if the stock went to zero. It’s a rate so off the charts, that only three other stocks in recent memory have exceeded it, according to data from Boston University’s Karl Diether and Wharton’s Itamar Drechsler, who have studied short selling back two decades.
Add in massive buying by Trump supporters who see it as a way to support their candidate, and losses could multiply fast.
“It’s scary,” says Drechsler, who likens buyers of Trump’s stock to unwavering sports fans. “It is everything that you hope that the stock market is not.”
Trump Media spokeswoman Shannon Devine said the company is in a “strong financial position” with $200 million in cash and no debt, and said the AP was “selecting admitted Trump antagonists.”
Another danger to the stock is a “short squeeze.” If the price rises sharply, it could set off a rush by short sellers who fear they’ve bet wrongly to return their borrowed shares right away and limit their losses. And so they start buying shares to replace the ones they borrowed and sold, and that very buying tends to work against them, sending the price higher, which in turn scares other short sellers, who then also buy, setting off a vicious cycle of price hikes.
“If DJT starts rallying, you’re going to see the mother of all squeezes,” says S3 Partners short-selling expert Ihor Dusaniwsky, who spent three decades at Morgan Stanley helping investors borrow shares. “This is not for the faint of heart.”
And if that wasn’t enough, there is a final oddball feature of DJT stock that could trigger an explosion in prices, up or down.
“Lock up” agreements prohibit Trump and other DJT executives from selling their shares until September. That leaves the float, or the number of shares that can be traded each day by others, at a dangerously tiny 29 percent of total shares that will someday flood the market. That means a big purchase or sale on any day that would barely move a typical stock can send DJT flying or crashing.
The float is smaller than that of most other notoriously volatile stocks. At their smallest levels, AMC, GameStop and Shake Shack each had more than double the float.
Seattle trader Cheung sees DJT’s freak characteristics as a reason to bet against the stock, not shy away. When the lock-up period ends, he predicts, the ex-president will indeed sell his shares, spooking the market and sending the price down sharply. And even if he doesn’t, other insiders whose lock-ups expire will fear he will do so and will move fast to get a good price before it falls.
“The first one to sell out is going make to most, ” Cheung says. “Everyone is going to sell.”
Still, he doesn’t want to lose money in the interim, so Cheung is offsetting some of his “put” bets with the purchase of “calls.” The latter are also derivatives, but they do the opposite, paying off when the stock rises. Cheung hopes that whichever makes money, the puts or the calls, he will make enough with one to more than make up for the loss of the other.
If all of this seems too complicated, there is a far simpler way to make money betting against Trump.
Offshore, casino-style betting sites are taking wagers on the 2024 election, and some have even made President Joe Biden the favorite.
 


Thai monk arrested over $9 million temple embezzlement

Updated 3 sec ago
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Thai monk arrested over $9 million temple embezzlement

BANGKOK: Thai police have arrested a Buddhist monk over allegations he embezzled more than $9 million from the prominent temple he ran which was funded by donations from devotees.
Investigators from the Central Investigation Bureau (CIB) accuse Abbot Phra Thammachiranuwat from Wat Rai Khing of siphoning more than 300 million baht ($9.05 million) from the temple’s bank account into his own.
Investigators traced funds from the temple on Bangkok’s western outskirts to an illegal online gambling network running baccarat card games, local media said.
Temples in Buddhist-majority Thailand rely heavily on income from “merit-making” ceremonies where worshippers make donations in hopes of gaining good fortune and better reincarnation.
Police charged Phra Thammachiranuwat with corruption and malfeasance, CIB deputy commissioner Jaroonkiat Pankaew told reporters at a press conference on Thursday.
“This (arrest) is to help purify our religion,” Jaroonkiat said.
Authorities have arrested a second suspect and are investigating whether others were involved, while local media reported the abbot has now left the monkhood.
Wat Rai Khing, believed to have been founded in 1851, houses a replica of the Buddha’s footprint.
The arrest from one of the Bangkok suburb’s most prominent temples has triggered significant backlash on social media.
“Next time I will donate to a hospital or school for good causes, not a temple,” one user posted on social media platform X.
Others cautioned their fellow Buddhists to remain firm in their faith.
“Not all monks are bad. Don’t generalize,” another X user wrote.

France sues Iran at top UN court over detained citizens

Updated 30 sec ago
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France sues Iran at top UN court over detained citizens

PARIS: Paris has filed a case against Tehran at the top UN court over two French citizens who have been held in Iran for three years, the French foreign minister said on Friday.
The announcement comes as Iranian negotiators are set to meet with their counterparts from the United Kingdom, France, and Germany in Turkiye on Friday for talks on Iran’s nuclear program.
Cecile Kohler, a 40-year-old literature teacher from eastern France and her partner Jacques Paris, in his 70s, were arrested on May 7, 2022, on the last day of a tourist trip to Iran.
They have been held on spying charges, which they have vehemently denied.
In its case at the International Court of Justice (ICJ), France accuses Iran “of violating its obligation to provide consular protection” to the pair, who “have been held hostage... detained in appaling conditions that amount to torture,” Jean-Noel Barrot told France 2 television.
They are among a number of Europeans still held by Iran in what some European countries, including France, regard as a deliberate strategy of hostage-taking to extract concessions from the West at a time of tension over the Islamic republic’s nuclear program.
Kohler and Paris are the last known French detainees in Iran after some recent releases and are regarded as “state hostages” by the French government.
The two are jailed in extremely tough conditions, according to their families.

Jihadists in Nigeria turn to TikTok to spread propaganda

Updated 5 min 3 sec ago
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Jihadists in Nigeria turn to TikTok to spread propaganda

LAGOS: Jihadists in northeastern Nigeria are surging -- and using social media to spread the word of their campaigns and recruit fighters.
At least 100 people were killed in the new wave of jihadist attacks in April alone, as the governor of Borno, the epicentre of the violence which has raged since 2009, said the state is losing ground to armed groups.
At the same time, apparent jihadists and their boosters on TikTok were flaunting rifles, grenades and stacks of cash, according to easily accessible videos reviewed by AFP that same month.
They broadcast live in joint videos with accounts run by men preaching anti-Western ideologies in a style reminiscent of the videos released by deceased Boko Haram leader Abubakar Shekau in the early days of the 15-year-old insurgency.
Criminal gangs that carry out raids on villages and kidnap for ransom in the northwest of the country have used TikTok in the past.
"It started with bandits," Bulama Bukarti, a vice president at Texas-based Bridgeway Foundation wrote on X. "Now, Boko Haram members are hosting live TikTok shows -- spreading propaganda, justifying their violence and threatening anyone who dares speak against them."
A Boko Haram fighter threatened Bukarti himself in a now-deleted TikTok video for speaking against the group, he said.
While many of the accounts on the video sharing app have been flagged and taken down, the capability of broadcasting live streams on the platform adds another layer of difficulty to monitoring the content they put out.
A TikTok spokesperson said it was difficult to quantify the number of accounts linked to terrorist organisations that have been taken down.
While some of these accounts have been deleted, several others remain active, according to accounts viewed by AFP at the time of publication.
"Terrorist groups and content related to these groups have no place on TikTok, and we take an uncompromising stance against enabling violent extremism on or off our platform," a spokesperson for the company told AFP in an emailed statement.


Among the 19 accounts reviewed by AFP were men dressed as clerics, their faces revealed to the camera even as they called for violence against the government and teamed up with accounts that showed off weapons hauls.
Accounts also post old footage of the original Boko Haram founder, Mohammed Yusuf, and those of Isah Garo Assalafy, who was banned from preaching in public places in Niger state for using violent rhetoric against democracy and Western civilisation.
These accounts frequently go live, interacting with followers, answering questions and receiving digital gifts that can be converted into cash.
Nigeria's jihadist conflict, which over the years has expanded to include a rival Islamic State group, has killed more than 40,000 and displaced some two million people in Africa's most populous country.
Saddiku Muhammad, a former jihadist who has since defected, told AFP that armed groups are turning to TikTok in part because security forces cracked down on the encrypted messaging app Telegram.
They also know TikTok is popular with young people.
"Jihadists realised that to capture the minds of young people, they need to speak to them in the language they understand -- instead of the traditional didactic and demagogic styles that are boring and unattractive to them," Muhammad said.
"From all indications, it is paying off. They are reaching out to young potential recruits."


Analysts told AFP that the use of TikTok by members of armed groups is a direct challenge to the government.
Malik Samuel, a security analyst at Abuja-based think tank Good Governance Africa, said it is a common Boko Haram tactic to use the group's young members to spread propaganda.
"I believe showing their faces is strategic -- to show that they aren't afraid and to let their target know that they are engaging with real people," Samuel said.
Islamic State West Africa Province, however, still appears to follow a more polished, top-down communication strategy than the apparent Boko Haram jihadists posting on TikTok, he said.
TikTok said it has partnered with UN-backed Tech Against Terrorism to improve the detection and removal of violent extremist content.
"Our community guidelines clearly state that we do not allow the presence of violent and hateful organisations or individuals on our platform," it said.
"We will always take action on content found to violate these policies."
oa-abu/tba/nro/kjm


Israeli strikes kill at least 20 people in Gaza as Trump wraps up his Middle East visit

Updated 20 min 33 sec ago
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Israeli strikes kill at least 20 people in Gaza as Trump wraps up his Middle East visit

GAZA: Israeli strikes killed at least 20 people in Gaza on Friday morning, as U.S. President Donald Trump wraps up his Middle East visit.
An Associated Press journalist counted the bodies at the Indonesian Hospital in northern Gaza, where they were brought. Survivors said many people were still under the rubble.
The widespread attacks across northern Gaza come as Trump finishes his visit to Gulf states but not Israel.
There had been widespread hope that Trump’s regional visit could usher in a ceasefire deal or renewal of humanitarian aid to Gaza. An Israeli blockade of the territory is now in its third month.
The Israeli military had no immediate comment on the strikes.


'Want change': in Spain, far right finds support with Romanians far from home

Updated 35 min 9 sec ago
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'Want change': in Spain, far right finds support with Romanians far from home

COSLADA: Romania's far-right presidential candidate George Simion has found strong support in a faraway place as he heads for a tense run-off election Sunday: Coslada, a shabby dormitory town outside Madrid with a large Romanian community.
The Spanish town of 80,000 people -- more than 20 percent of them Romanian -- shows the backing Simion has gotten from compatriots abroad, who are poised to help the 38-year-old win against his pro-European rival, Nicusor Dan, the centrist mayor of Bucharest.
At a cafe terrace near Coslada's so-called "Romanians' Square" -- once a meeting place for day labourers looking to be hired by contractors -- several immigrants from the Eastern European country said they had voted for Simion in the first round on May 4.
Simion, a fan of US President Donald Trump and head of the nationalist AUR party, stormed to first place in that vote with his anti-establishment message, taking 40.9 percent.
His margin of victory among the diaspora was even wider: he scored the backing of more than 60 percent of Romanians abroad.
In Spain, he won 74 percent of the vote.
"I want change. And so does everyone back home," said Mioara Mohora as she wrapped salami slices for a customer at the "Economic Market Discount" mini-mart, which was stacked with Romanian products such as pickled vegetables and beer.
Mohora, who is in her 40s and has lived in Spain for eight years, said she decided to cast her absentee ballot for Simion after Romania's constitutional court cancelled the country's initial presidential election last year over claims of Russian interference.
The decision, which came after dark-horse far-right candidate Calin Georgescu unexpectedly topped the first round in November, sparked sometimes violent demonstrations.
Georgescu has been barred from running again.
"It was a protest vote," Mohora said of her backing for Simion.
"They took away our right to vote for the person we actually wanted."


As she weighed minced meat at a nearby Romanian butcher shop, Mihaela Ionescu, 48, said Romanian authorities had "overturned the people's will" with the cancellation of the elections.
Ionescu, who has lived in Spain for two decades, said she did not vote last year or earlier this month, and has no plans to cast a ballot this weekend.
"Romanians are desperate. They are looking for a hero," she said when asked about Simion.
Romania's economy has rallied significantly since the collapse of communism in 1989, but the nation of around 19 million people still grapples with widespread corruption and lower living standards compared to wealthier western and northern European countries.
This has led many Romanians to move abroad. Some 600,000 of them live in Spain, making them one of the largest foreign communities in the country.
Coslada is home to around 17,500 Romanians. Local buses advertise flights to Bucharest, and many shop signs feature both Spanish and Romanian.


The Romanian diaspora is broadly split into two groups, according to the president of the Federation of Romanian Associations in Europe, Daniel Tecu.
"There are those who want to remain anchored in the European Union, who have witnessed Romania's development within the EU and want nothing more to do with Russia," he said.
Simion won votes mainly from the other group: people who are disappointed with the current political class and are "tired of corruption, angry, who don't return to Romania because it's not the country they want", he added.
Florin Padurariu, the owner of Botosani, a Romanian restaurant facing Coslada's train station -- which Simion visited during a tour of Europe ahead of the election -- said "the diaspora used to vote for pro-Europeans, but that's over now".
"I have always voted, but I have always been disappointed," added Padurariu, 55, who said he remained pro-EU and voted for Dan in the first round.
"After 20 years here, you still haven't learned anything? Europe allows you to support your mother, your father and your children, thanks to the money you earn here," he said.