Trump Media Skeptics Who Get Shares to Short Face Uphill Battle
- Investors face fees higher than 600% annually to short stock
- Lofty costs to borrow shares mean stock needs to drop quickly
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Shares of Donald Trump’s media startup are one of the most expensive to bet against in the US. As a measure of how costly, one back-of-the-envelope calculation shows the stock needs to drop 12% over the next week for short sellers to just break even.
The way short selling typically works is investors who borrow shares to then sell the stock pay a fee every day until the short bet is covered, when shares are returned to the party they borrowed from. Sky-high demand to bet against Trump Media & Technology Group Corp., the parent company of Truth Social, pushed annual financing costs to borrow shares to a whopping 600%, up from about 100% just a few weeks ago, data compiled by S3 Partners show.