A group of amateur Wall Street investors have been profiting from betting against the stock price of Donald Trump’s social media business, Truth Social. Despite massive buying by Trump loyalists and volatile swings in the stock price, these investors have collectively made tens of millions of dollars in the past month. Their bearish bets are driven by the company’s poor financials, with one investor stating, “This company makes no money… it makes no sense.”
While these investors have seen paper profits of at least $200 million so far, they remain cautious due to the stock’s volatility. Trump’s 65% stake in the company has already decreased in value, but is still worth $4 billion. Many believe the company’s financial report, which shows significant losses and doubts about its ability to continue, is a short seller’s dream.
Despite facing challenges such as high borrowing fees and potential short squeezes, these investors remain confident in their bets against the stock. The small float of shares available for trading could lead to drastic price movements in the future. Some are even hedging their bets by purchasing “calls” in addition to their “put” options.
For those looking for a simpler way to bet against Trump, offshore betting sites are taking wagers on the 2024 election, with some even favoring President Joe Biden. This complex and risky investment strategy highlights the potential rewards and dangers of betting against a controversial figure like Donald Trump.
Vocabulary List:
- Amateur (noun/adjective): A person who engages in a particular activity as a pastime rather than as a profession.
- Profiting (verb): Making a financial gain especially through investing or trading.
- Loyalists (noun): Individuals who are loyal to a particular person or cause.
- Financials (noun): Financial statements or reports.
- Float (noun): The number of shares available for trading to the public.
- Hedging (noun): Reducing the risk of adverse price movements in an investment by taking an offsetting position.
