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.
 


Russian court says US soldier charged with theft causing ‘significant’ damage

Updated 3 sec ago
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Russian court says US soldier charged with theft causing ‘significant’ damage

  • Detention of Gordon Black presents yet another diplomatic headache for the US
  • The US soldier was detained in early May in Vladivostok, in Russia’s Far East
MOSCOW: US soldier Gordon Black, who has been detained the Russian city of Vladivostok until July 2, has been charged with theft causing significant damage, a Russian court said.
The detention of Black, who the Pentagon said traveled to Russia without authorization, presents yet another diplomatic headache for the United States, which has warned US citizens against all travel to Russia.
He was detained in early May in Vladivostok, in Russia’s Far East.
The Pervomaisky District Court of Vladivostok said in a statement that it had decided on the preventive measure to detain Black until July 2 for “secretly stealing the property of citizen T., causing the latter significant damage.”
“When choosing the preventive measure in the form of detention, the court came to the conclusion that US citizen B. (Black) — under the weight of the charges — could hide from the preliminary investigation authorities and the court to avoid responsibility,” the court said in the statement.
Earlier, the court’s press service identified the soldier as Gordon Black.
The Russian interior ministry in Vladivostok said on Tuesday that a 32-year-old woman had filed a complaint against the 34-year-old suspect.
The two had met in South Korea. The American had come to Vladivostok to visit her, the two had an argument, and she later filed a police report accusing him of stealing money, it said. He was arrested in a local hotel, having bought a plane ticket to return home.
The Pentagon said on Tuesday that before his arrest in Russia, Black not only broke Army rules by traveling to the Russian city of Vladivostok without authorization, but he did so after passing through China.

US, Philippine and Australian forces sink a ship during war drills in the disputed South China Sea

Updated 53 min 13 sec ago
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US, Philippine and Australian forces sink a ship during war drills in the disputed South China Sea

  • Philippine President Ferdinand Marcos Jr.has ordered his military to shift its focus to external defense from decades-long domestic anti-insurgency operations

LAOAG, Philippines: Military force from the United States, Australian and the Philippines launched a barrage of high-precision rockets, artillery fire and airstrikes to sink a ship Wednesday as part of largescale war drills in waters facing the disputed South China Sea that have antagonized Beijing.
Military officials and diplomats from several countries, along with journalists, watched the display of firepower from a hilltop along a sandy coast in Laoag City on Wednesday in Ilocos Norte, Philippine President Ferdinand Marcos Jr.’s northern home province.
More than 16,000 military personnel from the United States and the Philippines, backed by a few hundred Australian troops and military observers from 14 countries were participating in annual combat-readiness drills called Balikatan, Tagalog for shoulder-to-shoulder, which started on April 22 and will end on Friday.
It’s the latest indication of how the United States and the Philippines have bolstered a defense treaty alliance that started in the 1950s.
Marcos has ordered his military to shift its focus to external defense from decades-long domestic anti-insurgency operations as China’s increasingly aggressive actions in the South China Sea become a top concern. That strategic shift dovetails with the efforts of President Joe Biden and his administration to reinforce an arc of alliances in the Indo-Pacific region to counter China.
China has angered the Philippines by repeatedly harassing its navy and coast guard ships with the use of powerful water cannons, a military-grade laser, blocking movements and other dangerous maneuvers in the high seas near two disputed South China Sea shoals that have led to minor collisions. Those have caused several injuries to Filipino navy personnel and damaged supply boats.
“We’re under the gun,” Philippine ambassador to Washington Jose Romualdez told The Associated Press in a telephone interview.
“We don’t have the wherewithal to be able to fight all of this bullying coming from China so where else will we go?” Romualdez asked. “We went to the right party which is the United States and those that believe in what the US is doing.”
China has accused the Philippines of setting off the hostilities in the disputed waters by encroaching into what it says are its offshore territories, demarcated by 10 dashes on a map. This has often prompted the Chinese coast guard and navy to take steps to expel Philippine coast guard and other vessels from that area. The Philippines, backed by the US and its allies and security partners, has repeatedly cited a 2016 international arbitration ruling based on the United Nations Convention of the Law of the Sea that invalidated China’s claim over virtually the entire South China Sea on historical grounds.
China did not participate in the arbitration complaint filed by the Philippines in 2013, rejected the ruling, and continues to defy it.
After an hour of the combat-readiness drills, black smoke started to billow from the stern of the mock enemy ship that was struck by missile fire and it started to sink ,as shown on a monitor watched by foreign military guests and journalists. US and Philippine warplanes later dropped bombs on the BRP Lake Caliraya, the target ship, which was made in China but decommissioned by the Philippine navy in 2020 due to mechanical and electrical issues, according to Philippine military officials.
Philippine military officials said the maneuvers would bolster the country’s coastal defense and disaster-response capabilities and claimed they were not aimed at any country. China has opposed military drills involving US forces in the region as well as increasing US military deployments, which it warned would ratchet up tensions and hamper regional stability and peace.
Washington and Beijing have been on a collision course over China’s increasingly assertive actions to defend its vast territorial claims in the South China Sea, and Beijing’s stated goal of annexing Taiwan, by force if necessary.
In February last year, Marcos approved a wider US military presence in the Philippines by allowing rotating groups of American military forces to stay in four more Philippine military camps. That was a sharp turnaround from his predecessor Rodrigo Duterte, who feared that a larger American military footprint could antagonize Beijing.
China strongly opposed the move, which would allow US forces to establish staging grounds and surveillance posts in the northern Philippines across the sea from Taiwan, and in western Philippine provinces facing the South China Sea.
China has warned that a deepening security alliance between Washington and Manila and their ongoing military drills should not harm its security and territorial interests or interfere in the territorial disputes. The Philippines countered that it has the right to defend its sovereignty and territorial interests.
“An alliance is very important to show China that you may have all the ships that you have, but we have a lot of firepower to sink all of them,” Romualdez said.


US paused bomb shipment to Israel to signal concerns over Rafah invasion, official says

Updated 08 May 2024
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US paused bomb shipment to Israel to signal concerns over Rafah invasion, official says

  • Israel has killed more than 34,700 Palestinians in Gaza, mostly women and children, according to the health ministry in the Hamas-run territory
  • The State Department is separately considering whether to approve the continued transfer of Joint Direct Attack Munition kits, which place precision guidance systems onto bombs, to Israel, but the review didn’t pertain to imminent shipments

WASHINGTON: The US paused a shipment of bombs to Israel last week over concerns that Israel was approaching a decision on launching a full-scale assault on the southern Gaza city of Rafah against the wishes of the US, a senior administration official said Tuesday.
The shipment was supposed to consist of 1,800 2,000-pound bombs and 1,700 500-pound bombs, according to the official, who spoke on the condition of anonymity to discuss the sensitive matter, with the focus of US concern being the larger explosives and how they could be used in a dense urban setting. More than 1 million civilians are sheltering in Rafah after evacuating other parts of Gaza amid Israel’s war on Hamas, which came after the militant group’s deadly attack on Israel on Oct. 7.
President Joe Biden’s administration in April began reviewing future transfers of military assistance to Israel as Prime Minister Benjamin Netanyahu’s government appeared to move closer toward an invasion of Rafah, despite months of opposition from the White House. The official said the decision to pause the shipment was made last week and no final decision had been made yet on whether to proceed with the shipment at a later date.
The State Department is separately considering whether to approve the continued transfer of Joint Direct Attack Munition kits, which place precision guidance systems onto bombs, to Israel, but the review didn’t pertain to imminent shipments.

 

 


Some colleges that had been permissive of pro-Palestinian protests begin taking a tougher stance

Updated 08 May 2024
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Some colleges that had been permissive of pro-Palestinian protests begin taking a tougher stance

  • Tensions have continued to ratchet up in standoffs with protesters on campuses across the US — and increasingly, in Europe — nearly three weeks into a movement launched by a protest at Columbia University
  • Israel has killed more than 34,700 Palestinians in Gaza, mostly women and children, according to the health ministry in the Hamas-run territory

CHICAGO: Police cleared a pro-Palestinian tent encampment at the University of Chicago on Tuesday after administrators who had initially adopted a permissive approach said the protest had crossed a line and caused growing concerns about safety.
University President Paul Alivizatos acknowledged the school’s role as a protector of freedom of speech after officers in riot gear blocked access to the school’s Quad but also took an enough-is-enough stance.
“The university remains a place where dissenting voices have many avenues to express themselves, but we cannot enable an environment where the expression of some dominates and disrupts the healthy functioning of the community for the rest,” Alivizatos wrote in a message to the university community.
Tensions have continued to ratchet up in standoffs with protesters on campuses across the US — and increasingly, in Europe — nearly three weeks into a movement launched by a protest at Columbia University. Some colleges cracked down immediately on protests against the Israel-Hamas war. Among those that have tolerated the tent encampments, some have begun to lose patience and call in police over concerns about disruptions to campus life, safety and the involvement of nonstudents.
Since April 18, just over 2,600 people have been arrested on 50 campuses, figures based on AP reporting and statements from universities and law enforcement agencies.
But not all schools are taking that approach, with some letting protesters hold rallies and organize their encampments as they see fit.
The president of Wesleyan University, a liberal arts school in Connecticut, has commended the on-campus demonstration — which includes a pro-Palestinian tent encampment — as an act of political expression. The camp there has grown from about 20 tents a week ago to more than 100.
“The protesters’ cause is important — bringing attention to the killing of innocent people,” university President Michael Roth wrote to the campus community Thursday. “And we continue to make space for them to do so, as long as that space is not disruptive to campus operations.”
The Rhode Island School of Design, where students started occupying a building Monday, affirms students’ rights to freedom of speech and peaceful assembly and supports all members of the community, a spokesperson said. The school said President Crystal Williams spent more than five hours with the protesters that evening discussing their demands.
On Tuesday the school announced it was relocating classes that were scheduled to take place in the building. It was covered with posters reading “Free Palestine” and “Let Gaza Live,” and dove was drawn in colored chalk on the sidewalk.
Campuses have tried tactics from appeasement to threats of disciplinary action to resolve the protests and clear the way for commencements.
At the University of Chicago, hundreds of protesters gathered for at least eight days until administrators warned them Friday to leave or face removal. On Tuesday, law enforcement dismantled the encampment.
Officers later picked up a barricade erected to keep protesters out of the Quad and moved it toward the demonstrators, some of whom chanted, “Up, up with liberation. Down, down with occupation!” Police and protesters pushed back and forth along the barricade as the officers moved to reestablish control.
Officials at the University of North Carolina, Chapel Hill, told deans and department chairs Monday that some students have been informed by instructors opposing the suspension of student protesters that they will withhold grades.
The school provost’s office said it will support “sanctions for any instructor who is found to have improperly withheld grades.”
At the Massachusetts Institute of Technology, protesters were given a deadline to voluntarily leave or face suspension. Many left, according to an MIT spokesperson, who said protesters breached fencing after the arrival of demonstrators from outside the university. On Monday night, dozens remained at the encampment in a calmer atmosphere.
MIT officials said the following day that dozens of interim suspensions and discipline committee referrals were in process, actions taken to ensure the “safety of our community.”
Sam Ihns, a graduate student studying mechanical engineering and a member of MIT Jews for a Ceasefire, said the group has been there for two weeks and is calling for an end to the killing in Gaza.
“Specifically, our encampment is protesting MIT’s direct research ties to the Israeli Ministry of Defense,” he said.
Many protesters want schools to divest from companies that do business with Israel or otherwise contribute to the war effort. Others simply want to call attention to the deaths in Gaza and for the war to end.
Wesleyan senior Uday Narayanan said students there are prepared to protest through the summer if that’s what it takes for their demands to be met.
“Our tuition dollars are still going toward the brutalization of Palestinians,” the 21-year-old physics major said. “So, ultimately, even though our president has said, ‘Oh, I’m not going to call the cops. Oh, I’m not going to beat up students,’ that’s still not enough, and that’s not the bare minimum for us.”
And as Wesleyan’s May 26 commencement approaches, some protesters fear they will be forcibly removed from the center of campus, adjacent to the field where the ceremony is to take place.
“The longer we are here, the more that their facade of laid back, hands off is falling away,” said Batya Kline, a 22-year-old graduate student. “We know that the university does not want us here, and we know that they can change their pace at the drop of a hat without letting us know.”
Frank Straub, senior director of violence prevention at nonprofit advocacy organization Safe and Sound Schools, said these and past protests have shown the need for early dialogue among the university, police and protesters to establish ground rules.
Straub said Wesleyan, for example, needs to have conversations about commencement and where protesters can be, and should make sure a plan is in place to respond, should protesters want to get arrested, so that can be done without violence.
“By their nature, protests are adversarial, but I think we can have controlled adversity,” he added. “And I think the more campus officials are engaged with the protesters and the more police are included in those conversations, that’s critically important.”
The protests stem from the conflict that started Oct. 7 when Hamas militants attacked southern Israel, killing about 1,200 people, mostly civilians, and taking roughly 250 hostages.
Vowing to destroy Hamas, Israel launched an offensive in Gaza that has killed more than 34,500 Palestinians, about two-thirds of them women and children, according to the Health Ministry in the Hamas-ruled territory. Israeli strikes have devastated the enclave and displaced most of its inhabitants.

 


Two suspected Kashmir rebels killed in clash with Indian forces

Updated 08 May 2024
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Two suspected Kashmir rebels killed in clash with Indian forces

SRINAGAR, India: Two suspected rebels were killed in Indian-administered Kashmir during a firefight with soldiers, police said Tuesday, at a time when campaigning for national elections is underway in the disputed territory.
Scores of soldiers besieged a residential area in southern Kulgam district, some 70 kilometers (43 miles) from Kashmir’s biggest city Srinagar, on Monday after armed militants were suspected to be present inside a house.
Two bodies of the suspected rebels “were recovered so far” from the site, police said in a statement posted Tuesday on social media platform X.
Images from the area showed smoke billowing from a house after it caught fire during the skirmish.
Kashmir has been divided between India and Pakistan since their independence in 1947, with both claiming the Himalayan territory in full.
Rebel groups opposed to Indian rule have for decades waged an insurgency in Indian-controlled Kashmir, demanding either independence or a merger with Pakistan.
The conflict has left tens of thousands of civilians, soldiers and militants dead.
Violence and anti-India protests have drastically reduced since 2019, when Prime Minister Narendra Modi’s government canceled the Muslim majority region’s limited autonomy.
But clashes between security forces and rebel groups have increased since voting began last month in India’s six-week election.
Three suspected rebels were killed and a police officer and three soldiers wounded in three separate clashes across the territory in April.
Militants ambushed a military convoy in Kashmir’s south on Sunday, killing one Indian air force corporal and wounding four other troops.