By Adam Clark
Trump Media & Technology Group stock was edging up early on Friday. The Truth Social parent is looking to end the week on a positive note while its executives take aim at short sellers for supposedly driving down the stock.
Trump Media shares were up 2.7% at $39.52 in morning trading. The stock closed up 7.9% on Thursday but it remains well below its highs of more than $60 reached immediately after its merger with a special-purpose acquisition company on March 25.
Former U.S. President Donald Trump's nearly 115 million shares in the company were valued at around $4.4 billion at Thursday's closing price. That figure includes 36 million earnout shares Trump was set to receive after the stock fulfilled the requirements of the award this week.
Trump is barred from selling Trump Media shares until a six-month lockup period expires. But he could seek a waiver from the company's board, which includes one of his sons and several former members of his administration.
Trump Media's revenue in 2023 was $4.1 million, and the company posted a net loss of $58.2 million, meaning the stock is hugely overvalued on most normal metrics. Its Truth Social platform is a niche player in social media compared with sites like Reddit or Meta Platforms' Facebook.
That disconnect between its price and underlying financials would normally make the company a target for short sellers, who aim to make money from a fall in a stock price by borrowing shares and selling them with the hope of buying them back later at a lower price.
However, the company is seeking to make life difficult for those hoping to profit from an eventual fall in its stock price. It is waging a public campaign against alleged "naked" short selling, which happens when an investor sells a stock without borrowing it first, often because it is difficult to obtain or because borrowing costs are high.
During the past week, Trump Media has advised stockholders on how to avoid their shares being lent out and its executives have written to the chair of the Nasdaq exchange and to Congress about potentially investigating trading in the stock. The company has provided no specific evidence that Trump Media stock has been manipulated.
Write to Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
April 26, 2024 09:54 ET (13:54 GMT)
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