The recent highly anticipated IPO that caught the stock market’s attention was Trump Media & Technology Group (NASDAQ: DJT), which brought Donald Trump’s social media platform, ‘Truth Social,’ to the public market with shares initially priced over $70 on March 26.
However, since then, DJT stock has experienced significant volatility, with substantial daily fluctuations in gains and losses. This volatility, coupled with high shorting activity by traders, has led to speculation about DJT’s classification as a ‘meme stock.’
Currently, the stock is trading at $45.13, marking a daily loss of 9.61%. This negative reversal follows a period of gains in the previous five trading sessions, during which the value of DJT shares increased by 22.30%.
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However, this time, there might be more to this shift in price than shorting activity and volatility, with suspicion of foul play.
What exactly happened with DJT stock in the last month?
On April 19, Trump Media communicated with Nasdaq regarding market manipulation concerns stemming from the ‘naked’ short selling of its stock.
Subsequently, within a span of just two weeks, DJT shares surged by a substantial 130% from their low point, returning the stock price to above $50 per share. Naked short selling, a form of securities fraud, adversely affects the underlying stock. This significant uptick in share price follows a period during which DJT experienced a sharp decline of 70% from March 27 to April 16.
Notably, the stock has exhibited a consistent upward trajectory since the company raised concerns about potential fraudulent activity to Nasdaq.
Was this surge in price done to bolster Trump’s finances?
This week, it was revealed through a regulatory filing that former President Donald Trump has acquired an additional $1.6 billion worth of shares in Trump Media. This increase in ownership resulted from the company’s stock reaching specific price milestones.
Trump received an additional 36 million shares in the company, which owns his social media platform Truth Social, bringing his total ownership to over 114 million.
Based on the closing stock price on May 1, these shares are valued at approximately $5.2 billion.
However, at present, this value is considered ‘paper wealth.’ Trump is currently restricted from selling shares for six months following Trump Media’s public debut unless he obtains a waiver from the company’s board.
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