According to S3 Partners LLC, short interest in Trump Media & Technology Group (DJT.US) surged last month after the social media company owned by former US President Donald Trump announced a merger agreement with private energy company TAE Technologies, triggering a significant stock price increase. The financial data provider stated that short positions in DJT climbed 31% to 15.8 million shares following the December 18th merger agreement with TAE Technologies, a company focused on nuclear fusion energy technology. This all-stock transaction is valued at over $6 billion. Under the agreement's terms, Trump Media & Technology Group and TAE will merge, with each party's existing shareholders holding approximately 50% of the new company on a fully diluted basis. To support the transaction's progress, Trump Media will provide TAE with a cash infusion of up to $200 million upon signing and an additional $100 million after the S-4 filing is submitted. As the parent company of Truth Social saw its stock price jump nearly 42% after the announcement of the $6 billion merger deal, short sellers rushed into the stock, representing a bet of over $200 million. S3 Partners indicated that approximately 10% of DJT's float is currently sold short, though this remains well below the annual peak reached in mid-June. S3 Partners added that the social media company's recent announcement of a digital asset distribution agreement with Crypto.com introduces another structural consideration for short sellers and arbitrageurs, as investors will recall lent-out shares to receive the distributed assets. Trump Media & Technology Group had previously partnered with Crypto.com to distribute a new digital token to its shareholders. The token may be non-transferable and cannot be converted into cash.
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