After an assassination attempt on former President Donald Trump, which sent shockwaves through the U.S. political landscape, Trump Media (NASDAQ: DJT) shares surged more than 60% in the early trading hours on Monday before retracing by 20% to the valuation of $36.89 at the latest close on July 16.
However, a fact bound to raise a few questions is that short positions against Truth Social stock supposedly doubled between July 1 and July 12, going from 7 to 15 million shares, in what would be a record of shares shorted for DJT stock since its trading debut, according to a post on X from user DiedSuddenly, on July 17.
Such a large short leading up to the assassination attempt would ignite suspicions that individuals or large organizations anticipated a significant drop in the stock’s value by July 15, a scenario that would likely have materialized had President Trump died in Pennsylvania.
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However, Fintel data retrieved by Finbold shows that the number of shares shorted didn’t noticeably increase when analyzing its short volume across the period.
Institutions took short positions against DJT stock
Austin Private Wealth, an asset management firm based in Texas, faced scrutiny after it initially appeared to have shorted 120,000 Trump Media shares on July 12, just before an alleged assassination attempt on Donald Trump.
Citadel made the second largest short position on May 31, with 16,770 shares shorted.
Austin Private Wealth attributed the short position to a clerical error in its Securities and Exchange Commission (SEC) filing, which was first recorded on June 30 and amended on July 16.
Previous occurrences of short interest before major events
A similar occurrence was observed on September 11, 2001, when substantial bets were placed against the stocks of major airlines, American Airlines (NASDAQ: AAL) and United Airlines (NASDAQ: UAL), the day before the attacks.
Subsequent investigations revealed that a single entity and an insider newsletter had tipped off investors, leading them to place fortuitous bets against the top two U.S. airlines, which suffered significant losses following the hijackings.
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