Rooting for Trump to fail has made his stock shorters millions

Pedestrians walk past the Nasdaq building on March 26, 2024, in New York with the stock price of Trump Media & Technology Group Corp., displayed on screens. (AP Photo)
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Updated 27 April 2024
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Rooting for Trump to fail has made his stock shorters millions

  • Wall Street investors have collectively make millions by betting that the stock price of Trump's social media business — Truth Social — will keep dropping despite massive buying by Trump loyalists

NEW YORK: Rooting for Donald Trump to fail has rarely been this profitable.

Just ask a hardy band of mostly amateur Wall Street investors who have collectively made tens of millions of dollars over the past month by betting that the stock price of his social media business — Truth Social — will keep dropping despite massive buying by Trump loyalists and wild swings that often mirror the candidate’s latest polls, court trials and outbursts on Truth Social itself.
Several of these investors interviewed by The Associated Press say their bearish gambles using “put” options and other trading tools are driven less by their personal feelings about the former president (most don’t like him) than their faith in the woeful underlying financials of a company that made less money last year than the average Wendy’s hamburger franchise.
“This company makes no money. ... It makes no sense,” said Boise, Idaho, ad executive Elle Stange, who estimates she’s made $1,300 betting against Trump Media & Technology stock. “He’s not as great a businessman as he thinks. A lot of his businesses go belly up, quickly.”
Says Seattle IT security specialist Jeff Cheung, “This is guaranteed to go to zero.”




The Truth social network logo is seen on a smartphone in front of a display of former US President Donald Trump in this picture illustration taken February 21, 2022. (REUTERS)

As of Friday’s close, a month since Trump Media’s initial public offering sent its stock to $66.22, it has dropped to $41.54. An AP analysis of data from research firms FactSet and S3 Partners shows that investors using puts and “short selling” have paper profits so far of at least $200 million, not including the costs of puts, which vary from trade to trade.
Still, amateur traders, mostly risking no more than a few thousand dollars each, say the stock is too volatile to declare victory yet. So they are cashing in a bit now, letting other bets ride and stealing a glance at the latest stock movements in the office cubicle, at the kitchen table or even on the toilet.
There have been plenty of scary moments, including last week when DJT, the ex-president’s initials and stock ticker, jumped nearly 40 percent in two days.
“I don’t know which direction the stock is going,” says Schenectady, N.Y., day trader Richard Persaud while checking his iPhone amid the surge. “It’s so unbelievably overvalued.”
Many who spoke to the AP say knowing their bets have helped slash the value of Trump’s 65 percent stake in half is an added political benefit. If some of their predictions are right, they may able to someday push it to zero, making it impossible for him to tap it to pay his hefty legal bills or finance his GOP presidential campaign.
They have a long way to go. Trump’s stake is still worth $4 billion.
Normally, investors betting a stock will fall, especially a gutsy breed of hedge fund traders called “short sellers,” will do plenty of homework. They’ll pore over financial statements, develop expertise in an industry, talk to competitors, and even turn to “forensic accountants” to find hidden weaknesses in the books.
No need in Trump Media’s case. It’s all there in the Sarasota, Florida-based company’s 100-page financial report: A firehose of losses, $58 million last year, on minuscule revenue of $4 million from advertising and other sources.
The losses are so big, as Trump Media’s auditor wrote in the report, they “raise substantial doubt about its ability to continue as a going concern.”
A short seller’s dream? Or is it a nightmare?
Amateur trader Manny Marotta has two computer screens at home, one for work, the other showing DJT stock’s movements where he can gauge how much he’s up or down.
It wasn’t looking so good earlier this week.




The stock price chart for the Trump Media and Technology Group on the NASDAQ website is seen on a computer screen in New York on April 19, 2024. (AP Photo)

The legal writer from suburban Cleveland had been up about $4,000 on “put” options purchased over the past few weeks. But the screen that morning was showing investors, presumably rich ones, buying large volumes of DJT shares, pushing up the stock once again.
“My options are worth less with every passing minute,” says Marotta, adding about DJT: “It’s being manipulated. It’s insane.”
Waiting for the stock to drop is especially painful to “short sellers,” who pay a fee to borrow shares owned by others. The idea is to quickly sell them on a hunch they will be able to buy the same number of them later for much cheaper before having to return them to the lender. That allows short sellers to pocket the difference, minus the fee, which is usually nominal.
In DJT’s case, the fee is anything but nominal.
It was costing 565 percent a year at one point earlier this month, meaning short sellers had only two months before any possible profits would be eaten up in fees, even if the stock went to zero. It’s a rate so off the charts, that only three other stocks in recent memory have exceeded it, according to data from Boston University’s Karl Diether and Wharton’s Itamar Drechsler, who have studied short selling back two decades.
Add in massive buying by Trump supporters who see it as a way to support their candidate, and losses could multiply fast.
“It’s scary,” says Drechsler, who likens buyers of Trump’s stock to unwavering sports fans. “It is everything that you hope that the stock market is not.”
Trump Media spokeswoman Shannon Devine said the company is in a “strong financial position” with $200 million in cash and no debt, and said the AP was “selecting admitted Trump antagonists.”
Another danger to the stock is a “short squeeze.” If the price rises sharply, it could set off a rush by short sellers who fear they’ve bet wrongly to return their borrowed shares right away and limit their losses. And so they start buying shares to replace the ones they borrowed and sold, and that very buying tends to work against them, sending the price higher, which in turn scares other short sellers, who then also buy, setting off a vicious cycle of price hikes.
“If DJT starts rallying, you’re going to see the mother of all squeezes,” says S3 Partners short-selling expert Ihor Dusaniwsky, who spent three decades at Morgan Stanley helping investors borrow shares. “This is not for the faint of heart.”
And if that wasn’t enough, there is a final oddball feature of DJT stock that could trigger an explosion in prices, up or down.
“Lock up” agreements prohibit Trump and other DJT executives from selling their shares until September. That leaves the float, or the number of shares that can be traded each day by others, at a dangerously tiny 29 percent of total shares that will someday flood the market. That means a big purchase or sale on any day that would barely move a typical stock can send DJT flying or crashing.
The float is smaller than that of most other notoriously volatile stocks. At their smallest levels, AMC, GameStop and Shake Shack each had more than double the float.
Seattle trader Cheung sees DJT’s freak characteristics as a reason to bet against the stock, not shy away. When the lock-up period ends, he predicts, the ex-president will indeed sell his shares, spooking the market and sending the price down sharply. And even if he doesn’t, other insiders whose lock-ups expire will fear he will do so and will move fast to get a good price before it falls.
“The first one to sell out is going make to most, ” Cheung says. “Everyone is going to sell.”
Still, he doesn’t want to lose money in the interim, so Cheung is offsetting some of his “put” bets with the purchase of “calls.” The latter are also derivatives, but they do the opposite, paying off when the stock rises. Cheung hopes that whichever makes money, the puts or the calls, he will make enough with one to more than make up for the loss of the other.
If all of this seems too complicated, there is a far simpler way to make money betting against Trump.
Offshore, casino-style betting sites are taking wagers on the 2024 election, and some have even made President Joe Biden the favorite.
 


Uganda’s president arrives in S.Sudan as crisis deepens

Updated 8 sec ago
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Uganda’s president arrives in S.Sudan as crisis deepens

  • The Ugandan leader, whose military was invited into South Sudan last month to help secure the capital, did not refer directly to the crisis in public remarks at the airport in Juba

NAIROBI: Uganda’s President Yoweri Museveni arrived in neighboring South Sudan on Thursday, in the highest level mission there since clashes and the detention of the vice president triggered regional fears of a return to civil war.
Museveni was met at the airport by South Sudan’s President Salva Kiir, whose administration has accused First Vice President Riek Machar of stoking rebellion and put him under house arrest.
The Ugandan leader, whose military was invited into South Sudan last month to help secure the capital, did not refer directly to the crisis in public remarks at the airport in Juba.
The visit follows mediation missions by the African Union and an East African regional body this week to de-escalate the crisis.
Museveni told reporters he would hold talks “aimed at strengthening bilateral relations and enhancing cooperation between our two nations.”
Kiir said the two leaders would discuss “current political developments in the country.”
The standoff between Kiir and Machar, who led opposing forces in a 2013-2018 civil war that killed hundreds of thousands, has prompted the UN to warn that the world’s young nation could be on the brink of all-out conflict along ethnic lines.
Uganda backed Kiir’s forces during the civil war.
It sent troops last month amid fighting between South Sudan’s military and an ethnic Nuer militia in Upper Nile state in the northeast.
Machar’s predominantly Nuer forces were allied with the White Army militia during the civil war, but his party denies government accusations of ongoing links.
Uganda’s military chief, Muhoozi Kainerugaba, also Museveni’s son, said on Tuesday he had ordered Ugandan forces to stop attacking the White Army so long as it ceases offensives against Ugandan troops.
Machar’s party says the Ugandan intervention violates South Sudan’s arms embargo.
Analysts say Kiir, 73, appears to be attempting to shore up his position amid discontent within his political camp and speculation about his succession plan.

 


Italy plans $22 million for migrant repatriations

Updated 5 min 13 sec ago
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Italy plans $22 million for migrant repatriations

  • The ministry said the plan would benefit “around 3,300 of the most vulnerable migrants, carrying out their repatriation to their countries of origin sustainably and effectively”

ROME: Italy plans to invest 20 million euros ($22 million) in a new project to help Algeria, Libya, and Tunisia send irregular migrants from their territories back to the migrants’ countries of origin.
The government of Prime Minister Giorgia Meloni has vowed to cut irregular migration to Italy’s shores from North Africa — the majority of whom depart from Libya and Tunisia.
However, many migrants who depart hail from other countries, especially sub-Saharan African countries.
Italy’s new plan “focuses on strengthening the institutional and administrative-managerial capacities of the partner countries,” with the involvement of 400 officials, Italy’s Foreign Ministry said in a statement.
Irregular migration would be better addressed “through the improvement and development of assisted voluntary repatriations from Algeria, Libya and Tunisia to the countries of origin,” it said.
It said the project would collaborate with the International Organization for Migration to ensure migrants’ rights.
The ministry said the plan would benefit “around 3,300 of the most vulnerable migrants, carrying out their repatriation to their countries of origin sustainably and effectively.”
It said Italy’s Agency for Development Cooperation, which helps carry out development activities, would provide technical support.
The agency has also been charged with another plan targeted at the “socio-economic reintegration of returning migrants,” tapping Italian companies and civil society groups, it said.
Most migrants arriving in Italy via the Mediterranean depart from Libya and Tunisia.
Italy has agreements with both countries to provide funding in exchange for help stemming departures.
On Wednesday, Libyan authorities said they would suspend the work of 10 international humanitarian groups, including Doctors Without Borders, accusing them of a plan to “settle migrants” from other parts of Africa in the country.

 


Driver of car in Amsterdam explosion may have been attempting suicide, police say

Updated 43 min 39 sec ago
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Driver of car in Amsterdam explosion may have been attempting suicide, police say

  • Police arrested the man, a 50-year old Dutchman, on suspicion of arson
  • Nobody was hurt in the incident except the suspect

AMSTERDAM: Dutch police said they believed the driver of a car that caught fire on Thursday following an explosion in central Amsterdam may have been attempting to commit suicide.
Police arrested the man, a 50-year old Dutchman, on suspicion of arson. Nobody was hurt in the incident except the suspect.
“Police detectives are keeping all scenarios open but have strong suspicions that the man wanted to take his own life,” police said on the social media platform X.


Earlier, police said camera footage had shown the fire was caused by an explosion, which happened among a crowd of people on Amsterdam’s busy Dam Square.
Images on social media show a man with burning clothes close to a small red car with flames billowing from its windows.
Police are seen extinguishing the flames on the man before taking him into custody.
Police sealed off the square while explosives experts investigated the vehicle. It was later removed from the square.
Last week, a man injured five people near Dam Square in a stabbing rampage. Police identified the suspect in that incident as a 30-year-old Ukrainian national from the eastern Donetsk region, who prosecutors said had acted with terrorist intent.

 


University of Birmingham students facing disciplinary hearing over pro-Palestine activism

Updated 03 April 2025
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University of Birmingham students facing disciplinary hearing over pro-Palestine activism

  • Student Antonia Listrat: ‘Funding genocide is violent; protesting genocide is peaceful’
  • Legal rights group sounds alarm over ‘nationwide crackdown’ on solidarity with Palestinians

LONDON: Two pro-Palestine students at the UK’s University of Birmingham are facing disciplinary proceedings over their activism, with a major legal rights group sounding the alarm over a “nationwide crackdown” on solidarity with the Palestinian people.

The European Legal Support Centre submitted legal documents to the university’s misconduct panel on behalf of the two students, Mariyah Ali and Antonia Listrat.

Amid the war in Gaza and sweeping pro-Palestine solidarity at institutions across the UK, the two students had demanded that their university divest from arms companies supplying the Israeli military.

Ali and Listrat face a disciplinary hearing on April 7, with the ELSC urging the university to dismiss the proceedings.

Coventry MP Zarah Sultana labeled the university’s move “an assault on democratic rights,” while the decision was questioned by UN Special Rapporteur Gina Romero, who highlighted “harassment, intimidation and reprisals” against the students at the university.

The pair have been supported by the university’s student body, which elected Listrat as guild president and Ali as ethnic minorities officer.

Ali said: “The disciplinary process against Antonia and me is a blatant attempt to suppress dissent and silence the wider student movement.

“This authoritarian crackdown is not just an attack on our right to protest — it is a display of institutional Islamophobia and bureaucratic repression.

“The student movement for Palestine is stronger than ever. Instead of charging students, the University of Birmingham must focus on divesting from companies complicit in genocide and war crimes.”

The student union also passed a motion supporting pro-Palestine solidarity that was subsequently blocked by union trustees.

By taking punitive measures against the students, the university is “contradicting the democratic will of students,” the ELSC said.

Anna Ost, the center’s senior legal officer, added: “We are deeply concerned that the university’s intention and effect in targeting these two students is to dissuade the wider university community from speaking out for Palestine.

“The university needs to change its approach, drop the disciplinaries, and demonstrate that fundamental freedoms are still promoted on its campus.”

The targeting of the students is part a wider crackdown on pro-Palestine activism across the UK in the wake of Israel’s war in Gaza.

Since October 2023, at least 28 universities across the UK have disciplined more than 113 students for activism, a joint investigation by Sky News and Liberty Investigates found.

The ELSC warned that the campus crackdowns, which have involved police and private security, is creating a “chilling effect” that “sets a dangerous precedent for campus democracy.”

British universities are legally bound to protect freedom of expression under the education and human rights acts, it added, warning that the University of Birmingham is “violating these obligations by penalizing students for their political beliefs.”

The center called on the university to dismiss the charges against the students and uphold freedom of speech, expression and assembly on campus.

Listrat said protesting is “an integral part of campus life” that signifies a “healthy and progressive society.”

She added: “As far-right rhetoric rises throughout the world, we need to make a huge effort to protect our rights and uphold international law and morality.

“Enabling genocide and profiting from human rights violations is quite a violent stance that the University of Birmingham has taken. Funding genocide is violent; protesting genocide is peaceful.”


German military to order exploding drones for first time, sources say

Updated 03 April 2025
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German military to order exploding drones for first time, sources say

  • Russia and Ukraine have fielded such single-use drones
  • The procurement of armed drones has been controversial in Germany

BERLIN: The German military will be armed with loitering munitions, or exploding drones, for the first time, two defense ministry sources said on Thursday, as Berlin tries to catch up with a technology that has shown its destructive power in Ukraine.
Both Russia and Ukraine have fielded such single-use drones, which cruise toward their target before plummeting at velocity and detonating on impact.
But the procurement of armed drones has been controversial in Germany, with some politicians associating them with targeted extrajudicial killings by US forces in Afghanistan.
It took years of heated debate before parliament agreed in 2022 to enable a large drone such as the Heron TP, which flies at much higher altitudes, to carry arms.
However, military upgrades are more urgent now for Germany, amid the continuing war between Russia and Ukraine and doubts about the future of US military protection.
Last month, parliament approved plans for a defense spending surge worth hundreds of billions of euros.
Contracts with two companies for a first batch of exploding drones will be signed in the coming days, the sources said, declining to name the companies. The army, air force and navy will test them in the following months.
“The use of drones and the defense against drones is crucial for the survival of our troops on the modern battlefield, that’s something we learned in Ukraine,” said one of the sources, who spoke on condition of anonymity.
“Each soldier must be capable of operating drones, just as today, everybody knows how to use binoculars.”
Germany will aim to sign longer-term contracts by the end of the year for a larger number of drones, shortening the period for introducing new weapons which usually takes years.
As drone technology evolves rapidly, the deals will specify that companies supply a limited number initially for training purposes, and that they may be asked later to supply a larger number of the latest models at short notice, if needed.
“There’s no use in purchasing thousands of drones ... only to realize they are outdated by the time we need them,” one of the sources said.