DJT Flow Analysis: $105M Net Short Position, 60% of Trading Volume Clustered, and a Yearly Low

Allegations of Naked Short Selling and Market Impact

In a 2024 letter to Congress, Trump Media accused firms like Jane Street and Citadel of engaging in naked short selling, claiming these entities were responsible for over 60% of DJT's trading volume. The company also referenced DJT's inclusion on Nasdaq's failure-to-deliver list as supporting evidence. Although no regulatory agency has brought formal charges against any of the named firms, these accusations have resurfaced amid new legal challenges facing Jane Street.

Despite the controversy, the market's response has been clear. Over the past 20 days, DJT's share price has dropped by 20.9%, indicating that investors are reacting to underlying fundamentals and broader market trends rather than to unverified claims. The stock has fallen 52% from its highest point in the last year, a decline driven by trading activity and price movement rather than regulatory disputes.

Ultimately, while the allegations have generated headlines, they have not significantly influenced trading patterns. The ongoing decline in DJT's price and the concentration of trading volume remain the primary concerns for shareholders.

Short Interest and Trading Activity: Key Figures

Recent data reveals that a hedge fund disclosed a short position of approximately $105 million earlier this month. This disclosure led Trump Media to formally request that the SEC investigate, underscoring the focus on this particular trade. However, DJT's liquidity statistics show moderate market activity, with a turnover rate of 1.78% and volatility at 4.83%, reflecting steady but not excessive trading.

These trading patterns occur against a backdrop of persistent downward pressure on the stock. Over the past 120 days, DJT's price has declined by 35.8%, outpacing the recent 20-day drop. The company's valuation also reflects these challenges, as the stock currently trades at a negative price-to-earnings ratio. Together, the significant short position and deteriorating fundamentals define the current investment landscape for DJT.

In summary, while the $105 million short position is a notable and documented trade, the broader story is one of ongoing selling pressure. The negative earnings multiple and sharp 120-day decline suggest that the market is factoring in continued difficulties, making the short interest a reflection of deeper issues rather than the root cause.

Upcoming Catalysts and Key Metrics to Monitor

Regulatory developments are the most immediate factors to watch. Investors should look for updates regarding Trump Media's request for an SEC investigation into the Qube Research short position. Additionally, any new filings related to short interest could indicate whether the $105 million position is increasing or decreasing, potentially influencing market sentiment.

Another important indicator is DJT's failure-to-deliver status on Nasdaq. The stock's presence on this list was central to the naked short selling allegations. Whether DJT is removed from or remains on the list will provide tangible evidence regarding the claims of market manipulation, shifting the discussion from speculation to observable trading activity.

Valuation remains a significant concern. With a price-to-sales ratio (TTM) of 805, the market is expecting exceptional and sustained growth. To support this valuation, DJT must demonstrate consistent revenue increases or improved profit margins. For now, the stock's steep decline over the past year and its negative earnings multiple indicate that investors remain cautious, and valuation concerns continue to weigh heavily on the stock.