Mr. Trump owns about 60 percent of shares and company executives also hold a chunk of the stock. Company insiders tend not to lend their shares to short-sellers. Big asset managers like BlackRock, Vanguard and State Street, which regularly lend out shares, are not major holders of Trump Media, further crimping the supply.
According to S3, 4.9 million of the roughly five million available shares are already on loan. As with any loan, when share owners lend their stock to a short-seller, they charge a fee, usually expressed as an annual interest rate on the stock’s current value. Typically, the fee for borrowing stock is a fraction of a percentage point. For Trump Media, it has risen to 550 percent, Mr. Dusaniwsky said.
Trump Media’s stock currently trades at around $50. That means that shorting it for a month would cost more than $20 per share. For a short-seller to break even, the stock price would have to fall by almost half by early May.
There is another wrinkle, too. One large broker said that much of the short trading is not an outright bet against Trump Media. Since the advent of meme-stock trading and the vilification of short-sellers that win only if popular companies lose, large investors are wary of making such trades.
Instead, the current trade driving demand is designed to capture the difference between DJT’s stock price and outstanding “warrants,” which will give the owners the right to new stock at a fixed price as long as the new shares are approved by regulators.
