- cross-posted to:
- politics@lemmy.world
- cross-posted to:
- politics@lemmy.world
And many traders are betting that the stock price will continue to fall further.
Shares of Trump Media have erased all their gains since they began trading under the ticker DJT last month.
The stock closed down more than 8% Monday at $37.17 after falling about 11% earlier in the day. It had traded above $79 a share on March 26, the day of its debut.
But experts say it’s hard to draw any firm conclusions about what the stock price’s movement means. That’s because so many available shares — about 12%, one of the highest ratios of any active stock listing — reflect traders’ bets that the stock will fall, said Ihor Dusaniwsky, managing director at S3 Partners, a data and predictive analytics company.
This is called short-selling.
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That stock is the first time that I actually considered shortselling anything.
I would have felt sick putting my money into it in the first place.
Maybe I am misunderstanding you, but I also would never think of actually investing in anything Trump.
Shortselling is betting that the stock value falls without actually holding the stock.
I admit I forgot what it meant when I posted that, but I don’t even think I would want my money involved in that sense. I just wouldn’t want my money involved.
Also, I don’t quite remember what happens if shorting fails, but it benefits the stock, doesn’t it? I’d hate to be wrong and then help out Truth Social on top of it.
Shorting fails if more people buy for more money. Shorting is basically getting a loan in stock, and expecting the stock to fall so that you can pay it back easier.
One example I had was that my country had a shitty currency that always lost value against the EUR, and at one point they offered loans with very low to no interest in that currency. If I took that loan, converted it to EUR, then I was basically shorting my country’s currency.
What you might think of is short squeezes, which happen when some people (or more likely financial institutions) buy up so much of the stock that there simply isn’t any of it the people who owe can buy. Then it goes way up for a time.
It happened at one point to VW, because Porsche bought most of the company for unrelated reasons, having people who took out loans in VW stock scrambling to find more stock to pay their debts back. You can read up on that incident to get to understand it better.
Shorting is basically getting a loan in stock, and expecting the stock to fall so that you can pay it back easier.
I’m still confused by this… doesn’t it mean you have to pay for the stock if it doesn’t fall as well? So in that case, it helps benefit Truth Social?
I guess I’m not understanding who benefits if shorting doesn’t work.
Whoever actually owns the stock and whoever you sold it to both benefit from the stock increase. Basically, everyone wins except the one shorting.
In other words, that would end up generating money for Trump himself.
Which sounds like a good enough reason not to make that gamble.
So you borrow a share of a stock from someone, promising to pay them back the shares and a little fee for them not having their shares available. You turn around and immediately sell their share. Let’s say the share was worth 100$, so you pocket that. You anticipate the stock dropping to 80, and if you’re right, when that happens you buy a stock of that company later and then give that stock to the guy you borrowed it from. You make 20$, pay that little fee, and go about your day.
If it doesn’t hit your target though, at some point you decide to cut your losses, since the fees associated with not giving back the stock are prohibitively high by design. If the share stayed at 100$, you just lose that little fee. If its 150$, you paid the fee and 50$.
You always buy a stock later, but shorting weakens a stock because you sold first and that reflects in the stocks price, potentially triggering other sales.
If you wanna say “ive never bought truth social stock” you can’t short, although you can still say “I’ve never invested in truth social”.
Did Trump already sell his shares?
If he did, then I’m pretty sure he broke the law. Again. I don’t think he was allowed to do that or use the shares to secure a loan.
Ah, I thought he was gonna use his shares to pay off his fines, but maybe he made money another way with the IPO?
People were publicly pointing out that the money made from that IPO was theoretical and unrealized gains that couldn’t be sold off for 6 months per SEC rules specifically because it was assumed that he would probably try. If it’s found that that’s what happened, we need to pressure the SEC to make the punishment more than just the cost of doing business. I’m tired of seeing businesses and billionaires getting fined only a couple million for stealing a couple billion.
Any wrongdoing is just gonna be another slap on the wrist, again. Turns out in America, billionaires hoard second chances, too; even the fake ones.
I don’t think he was allowed
And when exactly has that ever stopped him? And what was the penalty when he did what he wasn’t allowed? Wellllllllll………
He can’t do anything with them for 6 months. So this is just a gravy of shadenfreude.
his family is the board of the company and can waive the restrictions on selling at will
It’s delicious
It has negative income and no rational course to change that. Sadly the short sellers are profiting off the money laundering that was the entire intent.
