The initial daily trading (for September 20 to 27) was notably active. However, the final result was simply a 0% roundtrip. On Thursday, September 19, DJT’s final locked-up trade was $14.73. Then, after six days of active trading, it closed on Friday, September 27, at $14.75.
So, is that it? Is the excitement over? Probably not, because the various parties discussed in “Trump Media Stock (DJT) – A Possible Positive Surprise” will have different decision points and timelines for accomplishing their desired selling and buying. That said, the past six days provide a good view of the potentially offsetting trading ahead.
In the graph below, the selling led off, as was expected. A primary seller was United Atlantic Ventures (UAV), described in the CNBC report, “Trump Media shareholder UAV dumped nearly 11 million shares.” The selling was reported on September 26. (UAV had to report the sale because its shareholding had been over 5%.)
Likely, those sharp drops on high volume (labeled “selling”) include UAV’s selling of their 11 million shares. Then came the days of “buying,” shown by the sharp rises on high volume. A good portion of that buying could have been by short sellers, whose total short positions had risen to 14.5 million on September 13. The graph below shows how the short positions had grown, even as the stock declined toward the unlocking date.
Note: The short interest report is twice monthly. The next report, covering short interest as of Monday, September 30, will be released on October 9. It should show how active short sellers were in buying to reduce their short positions.
So, what comes next?
The stock’s 6-day behavior probably decreased the panic selling concern. But it was only six days. Therefore, examining next week’s behavior should help expand the understanding of what is ahead.
Keep in mind that the two major parties involved in the current trading (newly unlocked shareholders and short sellers) will eventually shrink their sizable positions. Then, the key fundamentals (business results and Trump brand strength) will resume their roles in the future.
The bottom line: The future likely starts with two important November events
First, the November 5 presidential election result. Whether Donald Trump is elected or not could affect significantly the value of the Trump brand associated with Trump Media.
Second, the mid-November Trump Media earnings report for the 3rd quarter. With the previous business and financial fundamentals being weak, more of the same could undermine the stock’s relatively high price. Alternatively, a strong report could reset the base and revive growth expectations.