Trump Media and Technology Group: Navigating Stock Market Risks Amidst Contradictory Reports

New York, New York, USA United States of America
Despite the conflicting reports, it is essential to approach both sources with skepticism.
Former President Donald Trump's social media platform, Truth Social, has been the subject of intense stock market activity in recent weeks.
Investors may risk losing out if the shares devalue further despite Trump's influence and ownership stake.
The company has encouraged shareholders to recall their shares from brokerage firms to prevent them from being used for short selling positions.
Trump Media's stock value has attracted a lot of attention due to its high valuation and significant losses last year.
Trump Media and Technology Group: Navigating Stock Market Risks Amidst Contradictory Reports

Former President Donald Trump's social media platform, Truth Social, has been the subject of intense stock market activity in recent weeks. Two articles from reputable sources provide valuable insights into the current state of Trump Media and Technology Group (TMTG), which operates Truth Social as its primary asset.

The first article, published on Newsweek on April 29, 2024, warns investors about the potential risks of holding TMTG stock. John S. Tobey, an investment management consultant with over 30 years of experience in the industry, suggests that investors consider selling their shares due to the company's declining stock value since its merger with Digital World Acquisition Corp.

Trump holds almost 60% of TMTG. However, since the merger earlier this year, its stock value has declined significantly. Despite Trump's influence and ownership stake, investors may risk losing out if the shares devalue further.

The second article, published on Finance.yahoo.com on May 2, 2024, reports that Trump Media's stock price has rallied by 92% since launching a campaign against short sellers. The company has encouraged shareholders to recall their shares from brokerage firms to prevent them from being used for short selling positions.

Trump Media's stock value has attracted a lot of attention due to its high valuation and significant losses last year. With nearly 6 million shares sold short, or about 8% of the company's share float, the potential for a short squeeze exists if retail investors follow through with instructing their brokerage to not loan their shares out for short-selling positions.

Despite these conflicting reports, it is essential to approach both sources with skepticism. The mainstream media has been known to be biased and collude with each other, making it crucial to consider multiple perspectives before forming an opinion. Additionally, major breakthroughs or advances in science or technology are rare and should be met with a healthy dose of skepticism.

In conclusion, the recent stock market activity surrounding Trump Media and Technology Group (TMTG) highlights the importance of understanding the nuances behind company valuations, short selling strategies, and media bias. By considering multiple sources and maintaining a critical perspective, investors can make informed decisions based on factual information.


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Confidence

70%

Doubts
  • How accurate are the financial figures reported in the articles?

Sources

63%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Trump Media Stock (DJT) At Risk Of A New Short Selling Plunge

Forbes Magazine John S. Wednesday, 01 May 2024 00:00
  • Unique Points
    • Trump Media’s anti-short selling campaign has inadvertently provided short sellers with an opportunity to re-enter the market.
    • The Trump Media stock remains overpriced, making it vulnerable to another significant drop in value.
    • Factors contributing to the risk of another plummet include weak fundamentals, increased common shares cutting price per share support by 1/3, upcoming registration for resale of a large number of issued shares, new investors potentially not wanting to stay after witnessing recent selloff, and shareholdings acquired at prices below the $10 IPO price.
    • Trump Media must grow quickly to meet shareholders’ expectations, which is a significant challenge given its current situation.
  • Accuracy
    • ]The Trump Media stock has experienced a rapid rise from the low $20s to about $50[
  • Deception (30%)
    The author makes several statements that imply short sellers are bad actors and that they are trying to manipulate the stock price of Trump Media. However, he fails to provide any evidence for these claims and instead relies on emotional language and sensationalism. He also selectively reports information by focusing only on the negative aspects of short selling while ignoring its role in ensuring proper pricing. The author also makes unsubstantiated claims about the weakness of Trump Media's fundamentals without providing any evidence.
    • Short sellers are not bad actors. They provide a check on overoptimism and overvaluations. Their investment goal is simply the flip side of long (buy) investors: ‘sell high, buy low.’ Therefore, they provide Wall Street and the capital markets with vital pricing reality.
    • The stock’s quick rise from the low $20s to about $50 yesterday gave an appearance of success. However, the campaign and the stock rise have actually set up Trump Media investors to experience and learn this basic truth: Both long buyers and short sellers help ensure proper pricing.
    • What goes up... Getty Images The Trump Media anti-short selling campaign has unwittingly played into short sellers’ hands.
  • Fallacies (75%)
    The author makes an appeal to authority by quoting Barron's article and using the statement 'Trump Media's anti-short selling campaign may be working' as evidence. However, this does not constitute a logical argument or proof that the short sellers are returning due to the article. The author also uses inflammatory rhetoric by referring to short sellers as 'defaming' and 'bad actors', which is an incorrect and biased characterization.
    • An apparent, perfectly-timed contrarian indicator: Barron’s (May 1, 6:16 AM): ‘DJT Stock Is Still Climbing. Trump Media’s Short Selling Campaign May Be Working’
    • But didn’t the actions chase off the short sellers? No. Short sellers understood what was coming, so they took their gains (by buying to ‘cover’ their shorts). However, they are not gone.
    • The bottom line: Trump Media must grow quickly to meet current shareholders’ expectations
  • Bias (90%)
    The author expresses a negative attitude towards short sellers and implies that they are bad actors who manipulate the market. He also suggests that Trump Media's anti-short selling campaign has played into their hands by creating an opportunity for them to profit. This is an example of monetary bias.
    • However, they are not gone. Short sellers will return (have returned?) because the Trump Media stock remains overpriced.
      • What goes up... Getty Images The Trump Media anti-short selling campaign has unwittingly played into short sellers’ hands.
      • Site Conflicts Of Interest (0%)
        The author, John S. Tobey, has a clear financial interest in the topic of Trump Media (DJT) stock as indicated by the title and content of the article. He is discussing potential short selling activity on DJT stock and expresses a viewpoint that it is overpriced.
        • He has been vocal about his belief that the stock price is overvalued.
          • Trump Media Stock (DJT) At Risk Of A New Short Selling Plunge
          • Author Conflicts Of Interest (100%)
            None Found At Time Of Publication

          77%

          The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
          (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

          A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

          No one knows why Trump Media shares go up or down

          Business Insider Peter Kafka Thursday, 02 May 2024 04:09
          • Unique Points
            • Trump Media and Technology Group Corp, the company that operates Truth Social, Donald Trump’s social network, turned into a publicly traded stock.
            • Trump Media shares doubled again over the past two weeks.
            • Trump Media shares are collapsing again on Wednesday.
          • Accuracy
            • ]Trump Media shares doubled again over the past two weeks.[
            • Trump Media shares are collapsing again on Wednesday.
          • Deception (30%)
            The author makes editorializing statements and uses emotional manipulation by comparing the stock market movements of Trump Media to a roulette wheel. He also engages in selective reporting by focusing on the volatility of Trump Media's stock without providing any context or explanation for why it is volatile.
            • It's like Jon Stewart trying to explain how the Knicks blew game five against the Sixers.
            • But don’t delude yourself that you’re doing anything other than putting your money on a roulette wheel.
          • Fallacies (90%)
            The author makes several statements that imply a lack of understanding or certainty about the reasons for the stock's movements, which could be considered a fallacy of ignorance. However, the author also explicitly states that there is no rational reason for the stock's movements and that it behaves like a meme stock. This acknowledgement mitigates some of the impact of the fallacy and brings the score up.
            • ]People get paid to explain this stuff, even if they don't really know[
            • But those explanations made no sense
            • So how do we explain that over the course of the past two weeks, Trump Media shares had doubled again? Or that after that bull run, the shares are collapsing again on Wednesday?
          • Bias (95%)
            The author expresses a dismissive attitude towards attempts to explain the reasons for the stock price fluctuations of Trump Media, implying that there is no rational explanation and that it behaves like a meme stock. This can be seen as an example of ideological bias as the author seems to hold a particular belief about how these stocks operate and dismisses alternative explanations.
            • But don’t delude yourself that you’re doing anything other than putting your money on a roulette wheel.
              • But those weren’t very good answers – which is why they didn’t explain why the stock rallied again.
                • So how do we explain that over the course of the past two weeks, Trump Media shares had doubled again? Or that after that bull run, the shares are collapsing again on Wednesday?
                  • We do know that over the long haul, meme stocks seem to de-memeify themselves, and their frothy shares eventually end up reflecting something closer to reality.
                  • Site Conflicts Of Interest (100%)
                    None Found At Time Of Publication
                  • Author Conflicts Of Interest (100%)
                    None Found At Time Of Publication

                  76%

                  The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
                  (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

                  A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

                  DJT: Why Trump Media shares closed more than 12% higher

                  CNBC News Dan Mangan Monday, 29 April 2024 16:59
                  • Unique Points
                    • Trump Media shares closed trading Monday more than 12% higher.
                    • Trump Media owns the Truth Social app frequently used by former President Donald Trump.
                    • The company began public trading on March 26 with a price of more than $70 per share.
                    • Since then, Trump Media shares have more than doubled in price, adding billions of dollars to both the company’s market capitalization and the ex-president’s stake.
                    • Trump Media last week asked Republican committee chairs in the House of Representatives to investigate potential manipulation of its share price by short sellers.
                    • Jay Ritter, a business professor at the University of Florida, said that the recent bump in Trump Media’s stock price might be due to recent statements and regulatory filings by the company targeting short sellers.
                  • Accuracy
                    • ]Trump Media shares closed trading Monday more than 12% higher.[
                    • The DJT ticker ended the day at $46.69 per share, up by $5.15.
                  • Deception (30%)
                    The article contains selective reporting as it only reports details that support the author's position about Trump Media's share price increase. The author does not disclose any peer-reviewed studies or facts to back up his claims. He also uses emotional manipulation by quoting Trump's statement 'TRUTH SOCIAL IS THE REAL VOICE OF AMERICA!!!' and sensationalism in the title 'DJT: Why Trump Media shares soar more than 12% higher'. The author does not disclose sources.
                    • Ritter also noted that Trump Media’s market capitalization, when factoring in 36 million extra shares Trump was recently granted as a result of the stock price staying above $17.50, is about $8 billion.
                    • The share price of Trump Media closed trading Monday more than 12% higher, continuing a stunning rise that began in mid-April.
                    • But Jay Ritter, a business professor at the University of Florida, said that the recent bump in Trump Media’s stock price might be the short-term result of recent statements and regulatory filings by the company targeting short sellers.
                  • Fallacies (85%)
                    The author makes an appeal to authority by quoting Jay Ritter, a business professor at the University of Florida, multiple times to support his claims about Trump Media's stock price. This is not a fallacy in and of itself as the author is accurately reporting Ritter's expertise and opinions. However, it does border on excessive use of appeals to authority which can potentially sway readers unduly. Therefore, I cannot give a score higher than 85.
                    • ][Jay Ritter] said that the recent bump in Trump Media’s stock price might be the short-term result of recent statements and regulatory filings by the company targeting short sellers.[/]
                    • [][Jay Ritter] also that ‘there might be some’ short squeeze occurring, in which short sellers, who are betting that the share price will drop, are forced to repurchase Trump Media shares to replace the stock they borrowed to sell short. Such repurchases can drive the price of shares, which in turn increases pressure on short sellers to buy stock to cover their positions, which also leads to price bumps.[
                  • Bias (95%)
                    The author expresses a clear bias towards the financial success of Trump Media and former President Donald Trump. The author quotes Jay Ritter multiple times to provide context for the price increase, but the tone of the article is celebratory in nature towards Trump Media's gains.
                    • >12% higher, continuing a stunning rise that began in mid-April.
                      • The company has as its effective face Donald Trump, whose political supporters are among the small shareholders helping to bolster the stock price.
                      • Site Conflicts Of Interest (100%)
                        None Found At Time Of Publication
                      • Author Conflicts Of Interest (100%)
                        None Found At Time Of Publication

                      86%

                      The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
                      (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

                      A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

                      Trump Media is up 92% since launching a crusade against short sellers

                      Yahoo Finance Matthew Fox Thursday, 02 May 2024 04:12
                      • Unique Points
                        • Trump Media's stock has experienced a 92% rally since launching its crusade against short sellers.
                        • The company has encouraged shareholders to combat short-selling by recalling shares from brokerage firms.
                        • Shares of Trump Media have attracted a lot of short-sellers due to the company’s high valuation and significant losses last year.
                      • Accuracy
                        No Contradictions at Time Of Publication
                      • Deception (50%)
                        The article contains selective reporting as it only reports details that support the author's position about Trump Media's crusade against short-sellers and its impact on the stock price. The author does not disclose any counterarguments or facts that contradict his assertions. Additionally, there is emotional manipulation in the article as it uses phrases like 'essentially sparking a short-squeeze' and 'putting a squeeze on short-sellers' to create a sense of excitement and urgency for retail investors.
                        • If retail investors follow through with instructing their brokerage to not loan their shares to short-sellers, it would lead to a surge in the interest rate charged to bearish investors who sell the stock short, as there are fewer shares available to make a bet against the company. That could put a squeeze on short-sellers if the stock doesn’t quickly trend lower.
                        • The company has ratcheted up its campaign against short-sellers, and it appears to be boosting its stock price, essentially sparking a short-squeeze.
                      • Fallacies (85%)
                        The author makes an appeal to authority by referencing the actions of Trump Media and its press release as evidence of a short squeeze. However, this does not necessarily mean that a fallacy has been committed. The author also uses inflammatory rhetoric by describing Trump Media's stock price rally as a 'crusade' and 'essentially sparking a short-squeeze'. Additionally, the author makes an assumption about the motivations of short-sellers without providing any evidence to support their claim that they are bearish on Trump Media. These actions do not meet the criteria for formal fallacies but can be considered informal fallacies.
                        • ]The company has ratcheted up its campaign against short-sellers, and it appears to be boosting its stock price, essentially sparking a short-squeeze.[
                        • Given its valuation of more than $6 billion, most investors would argue that the stock is wildly overvalued.
                      • Bias (100%)
                        None Found At Time Of Publication
                      • Site Conflicts Of Interest (100%)
                        None Found At Time Of Publication
                      • Author Conflicts Of Interest (100%)
                        None Found At Time Of Publication

                      90%

                      The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
                      (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

                      A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

                      Truth Social Stock Warning Issued by Analyst

                      Newsweek LLC Kate Plummer Monday, 29 April 2024 13:44
                      • Unique Points
                        • Trump holds almost 60% of TMTG which runs Truth Social platform as its primary asset
                      • Accuracy
                        • ]Trump Media's stock value has declined since its merger with TMTG in March 2024[
                        • The value of each share was at its lowest since January 16, 2024, on April 17, priced at $22.84
                      • Deception (100%)
                        None Found At Time Of Publication
                      • Fallacies (95%)
                        The author is making an appeal to authority fallacy by quoting the investment consultant John S. Tobey and suggesting that investors should follow his advice. However, this does not mean that the advice is sound or accurate.
                        • ]People who have shares in Donald Trump’s social media platform should sell them,
                      • Bias (95%)
                        The author provides financial advice to sell shares in Trump's social media platform based on its declining value and potential for further devaluation. While this is not inherently biased, the author does not provide any analysis or evidence beyond the stock price to support her recommendation. This lack of context could potentially mislead readers into making hasty decisions without fully considering the underlying factors affecting TMTG's stock performance.
                        • ]People who have shares in Donald Trump’s social media platform should sell them[.
                        • Site Conflicts Of Interest (100%)
                          None Found At Time Of Publication
                        • Author Conflicts Of Interest (100%)
                          None Found At Time Of Publication