Mega-Thread: Trump Focused Discussion

[Benggaul]

I admit, I'm not 100% sure how this part will work...

The "billion" was just a nice, round number to make my point. I'm not convinced his brokers will find enough buyers to net him that much either, but it'll still be enough that he gets to enjoy it from both sides...meaning he'll get a fucking huge, undeserved, unearned amount of cash and still be able to whine to anyone who will listen that "The Dems" somehow cheated him out of his rightful payment. The only way he loses on this is if, as I said, his broker in charge of selling off those shares can't unload any of them for whatever reason until it it's too late.

I'm also not terribly familiar with how things work tomorrow (today for me)...are there "safeguards" in place that will temporarily halt all transactions if the value plummets past a certain amount? That's already happened, no? Frankly I'm just disappointed the stock isn't already worthless at this point given all the shit that's gone on since it became a stock.

[Breccia]

Remember when Team Trump tried to make it harder to short sell?

Trump Media, the parent company of the former president’s Truth Social, alerted Nasdaq Inc. on Thursday of what the company suspects is illegal activity driving down the price of its shares.

April 18th, the date of this article in which Truth Social told its shareholders how to block short selling. It was due to

"Remain Calm," one user wrote on April 15, the day Trump Media shares plummeted 18%. "This drop was literally just someone selling 140k shares in 10 minutes premarket. This is extreme manipulation at best. There isn't a massive sell-off. It's one or a handful of people trying to cause panic."

At the time, 140k shares would have been worth April 5's value of $40.59, so, about $5,700,000 or so.

Ah, good times...good times...

Fast forward to now. The amount of perfectly legal shares lined up for perfectly legal short selling is $231 million.

At this point, about 17.5% of the total number of shares outstanding in the company which operates the Truth Social platform, are tied up in short sales — which involves borrowing a stock at one price, expecting it to decline in value, and then selling it on the open market in the expectation that it can be bought back later at a lower price for return to the lender, typically a brokerage firm.

Now, again I'm no expert, but that 17.5% surely must come from the small investors that were never locked up. But that sounds like a very large portion of Truth Social stock involved in planning for failure.

“Not only will the possible new selling activity affect DJT’s stock price directly, it will also increase DJT’s stock-lending pool which will facilitate increased short selling,” S3 analyst Igor Dusaniwsky said in a research note.

"...what? Explain that to me like I'm a toddler."

This stock is so bigly, so yuge, nothing like this has been seen before-

"Har har. Explain what that expert meant in layman's terms."

If people short sell, the price drops; if the price drops, Trump sells in self-defense; that makes more stock available for more short selling. Something that is now very difficult for new players to do, because the stock is locked up by (a) people looking to short-sell themselves, or (b) people who couldn't sell until the opening bell.

The stock’s borrow-utilization rate is at 99%, which ranks as the sixth-highest in the Russell 3000 he said, with less than 200,000 shares of currently available to borrow to support new short positions.

The scarcity of shares available to short has led to a higher cost of borrowing, to a range of 30% to 40%, which is about 100 times the general collateral rate of 0.3% making up 94% of all short interest, S3 said.

People who know what they're doing are betting on Truth Social to crash. Soon.

- - - Updated - - -

I'm also not terribly familiar with how things work tomorrow (today for me)...are there "safeguards" in place that will temporarily halt all transactions if the value plummets past a certain amount? That's already happened, no?

Yes, I recently quoted where Trump accused NASDAQ of working for Biden when their automated safeguards triggered after his announcement that he would 100% surely never sell his stock ever ever ever. That works in both directions. I don't think it will do much other than delay the inevitable.

[Doomcookie]

I admit, I'm not 100% sure how this part will work.

Trump cannot simply walk onto the NYSE floor, yell "SELL!" and walk out with a briefcase with a billion dollars in it. He can put out a public offer to sell at a certain price and wait for someone to buy at that price. Meaning, he'd need a billion dollars worth of idiocy waiting to buy. I do not believe such money still exists. Anyone who wanted to invest in Trump's stock at a low price had all of 2023 to do it. Now, Trump is a convicted felon losing the 2024 race, and announcing a sale of his own stock would be admission he thinks the platform will fail. Maybe some people will buy at $14, but a billion dollars' worth? I don't believe it.

And that's not counting the other major investors. They want out before Trump dumps, too.

As I cited earlier, the smart move would be for all investors to collectively shave off small amounts at a time to prevent a sudden market dumping selloff. Which means they'd all have to look each other in the eyes and trust that none of them would suddenly sell off a larger portion, crashing the price for everyone else. Yeah, look at Trump and his investors, and tell me that level of trust exists.

Now as to the spirit of your point, yes, I believe Trump is about to make a large amount of money out of nothing. But I believe it's effectively impossible for him to get the full market share of paper value he currently holds tomorrow. There isn't a billion dollars worth of free investing money out there, just so eager to buy Truth Social now that Trump is losing, Tweeting, and admitting he's senile by speaking in public. If he announces he's lost faith in his own company by selling it, nobody will pay full price for a company that's done nothing but lose money since it started.

It will be very difficult to sell a lot at a time, strictly because of how many analysts are going to be watching how many shares are being sold. Any jump in stock sales after today, could mean a run on the bank, so to speak. I'd bet nearly anything that there have been private discussions between Trump's people, and the other major shareholders who are as shitty as he is.

This is almost like its own Prisoner's Dilemma.

[Breccia]

I'd bet nearly anything that there have been private discussions between Trump's people, and the other major shareholders who are as shitty as he is.

I agree.

And like you, I'm pretty sure every single one is thinking "They've all agreed to hold their shares. What a bunch of suckers. Now I'll be the only one selling!"

[Doomcookie]

I agree.

And like you, I'm pretty sure every single one is thinking "They've all agreed to hold their shares. What a bunch of suckers. Now I'll be the only one selling!"

Even a small uptick in trades will set off alarm bells, and the dumping will begin. The short sellers are going to make out on all of this. The volume has been increasing pretty dramatically over the past couple weeks. The price dropped immediately when the deadline hit at 4PM, yesterday. Volume was high yesterday, so there's a chance they already sold some stock. I expect the volume today to be even higher.

[PhaelixWW]

The price dropped immediately when the deadline hit at 4PM, yesterday.

Well, I've been told that after hours and premarket trading are "irrelevant", but hundreds of thousands of shares have moved between yesterday's close and now, and it's been pretty steadily going downhill.



This is not just a few highly volatile trades, either.

[Doomcookie]

Well, I've been told that after hours and premarket trading are "irrelevant", but hundreds of thousands of shares have moved between yesterday's close and now, and it's been pretty steadily going downhill.



This is not just a few highly volatile trades, either.

Yeah, the volume is already high as Tommy Chong circa 1986.

I'm totally not dating myself with that reference.

[Breccia]

Well, I've been told that after hours and premarket trading are "irrelevant"

Sorry, that was meaner than I intended to sound.

[PhaelixWW]

Well, in the last hour, the price has dipped down a little bit, but through a lot more volume: almost half a million shares in just the last hour of premarket movement.



Say, if a stock opens the day over 5% down from the previous close, is that considered a bad thing?

[Shadowferal]

Say, if a stock opens the day over 5% down from the previous close, is that considered a bad thing?

Depends on who you ask.

[PhaelixWW]

So the share price dropped $0.92 during trading yesterday, and it might just hit that much lost again before trading opens up today.

That's rough.

[Breccia]

That's rough.

Shame it didn't hit $12. Which, actually, other than the opening price (which with the buyback thing being dead and gone doesn't count) I don't think it's ever been $12. Kind of wondering why $12 was part of the contract, now that I think about it.

[ati87]

Shame it didn't hit $12. Which, actually, other than the opening price (which with the buyback thing being dead and gone doesn't count) I don't think it's ever been $12. Kind of wondering why $12 was part of the contract, now that I think about it.

12 dollars was the price of the company it merged with.

Not sure if I remember right was but the way Truth social went public was to merge with another company so going public would be easier, and you aren't required to report some things.

[Breccia]

and you aren't required to report some things.

"Most transparent government ever" ladies and gentlemen.

[ati87]

So the share price dropped $0.92 during trading yesterday, and it might just hit that much lost again before trading opens up today.

That's rough.

not it is 0.95 or 6.5%

sorry I mean 7.1%

[Breccia]

You know...Hannity never made up a bullshit story. Uh..well, either he's planning to do it later today, creating a giant spike just when Trump hits the "SELL SELL SELL" button, or he realized nothing he could say could possibly brace for impact enough...or more realistically, called that one wrong.

I was so sure.

[gondrin]

Hmm, but won't Trump be able to sell tomorrow? Even at that price he'll be making, what, at least a billion from absolutely nothing? I hope some "glitch" keeps his broker locked out until it's a literal penny stock.

Not really. Thing about stocks, much like bitcoin, is that someone has to buy it from him. And as of now, I don't see anyone buying that many shares of the company. A few thousand shares? Sure. But when you get into the millions of shares, that actively has to be reported to the SEC and the NYSE has the ability to put a hold on it outright to make sure things are on the up and up. And if there is nobody willing to buy those shares then he makes no money.

[PhaelixWW]

You know...Hannity never made up a bullshit story. Uh..well, either he's planning to do it later today, creating a giant spike just when Trump hits the "SELL SELL SELL" button, or he realized nothing he could say could possibly brace for impact enough...or more realistically, called that one wrong.

I was so sure.

Well, Trump's been able to legally sell since yesterday.

[Breccia]

Well, Trump's been able to legally sell since yesterday.

But only privately, right? The markets were closed?

I have to wonder, if Trump approached anyone with a private sale, what price was he asking? Because you and I and the world knows it's not worth $14

[gondrin]

So, it has dropped 1.00 so far. For most well known tech companies, that isn't much.

However, for this company, that is literally 6-7% of their entire net worth. That would be like if Apple, valued at nearly $3.7 trillion, were to lose in one hour about $200 billion in value.