More than one in eight of Trump Media’s outstanding shares are being held by short-sellers, people banking on the stock dropping in price, more than three times the typical percentage of traders shorting the stock, Yahoo Finance reports.
According to securities analytics firm S3 Partners, about 13% of Trump Media shares are held by “short interest” traders, while the average short position on a publicly traded stock is 3- to 4 percent. Shorting a stock means you’re essentially “selling” a stock from your broker’s portfolio while the stock is high, and then “buying” the same stock to refill your broker’s portfolio; if you “buy” at a lower price, you make a profit.
While the stock has risen over the past two days, corporate officials still fear the impact of being overleveraged by shareholders hoping for another Trump failure. The company included guidance in its website advising shareholders how to prevent their shares from being used by short-sellers: “To prevent shares from being loaned for a short interest position, contact your brokerage to place restrictions on the lending of your shares to short sellers.”