Truth Social Controversy: Investors Profiting From DJT Stock Short-Selling

The surge of interest from investors towards former President Donald Trump’s social media platform, Truth Social, has taken an unexpected turn. Rather than showing enthusiasm for its potential success like he might hope for, many have opted to short-sell DJT stock as a way to profit off the company’s questionable metrics. An analysis by The Associated Press puts profits from these bettors at around $200 million so far, not including upfront premiums that are large due to perceived overvaluation of the shares. Some investors have purchased “put” options as a way to cash in if they accurately predict where Truth Social’s stock price will end up by certain dates. These put options pay out when the predicted strike prices fall below a predetermined amount, allowing buyers to sell 100 shares at that lower rate for potential profits. However, these bets can also fail and result in losses if the stocks don’t move or go above their initial price points by expiration dates. The DJT stock has been falling since it reported a revenue of only $4.1 million on April 1st with fears over an expected influx of new shares that could dilute Trump’s net worth, currently estimated at just under $7 billion according to Bloomberg, more than half of which is tied up in Truth Social stock holdings. Some critics argue the company doesn’t generate enough revenue and its fall since reporting April 1st figures makes no sense given this fact. Seattle IT security specialist Jeff Cheung has gone as far as saying that DJT’s value will inevitably drop to zero, while Elle Stange from Boise, Idaho estimates she has made $1300 betting against the Truth Social stock so far. Trump Media CEO Devin Nunes recently raised concerns about “naked” puts, claiming these put options were being used in an underhanded manner though this practice is permitted by SEC rules. If necessary, he pledged to take legal action or lobby Congress on behalf of retail investors who have invested in the company’s stock. Despite its recent drop, Truth Social’s shares haven’t faced a significant fall until recently due largely to Trump supporters’ faithfulness towards it as an act of loyalty or campaign contributions rather than financial gain expectations.