Skeptics may have believed that yesterday’s gains for social media platform Truth Social (NASDAQ:DJT) were a temporary phenomenon, a dead cat bounce following several straight days of decline. But today’s results noted that the phenomenon may not have been all that temporary. Shares of the controversial social media offering shot up nearly 15% in Thursday afternoon’s trading.
Gains for Truth Social were higher earlier in Thursday’s session, briefly hitting as much as 20% over the previous day. As for reasons behind the erratic price moves, some believe that they are in response to short sellers who thought that the decline would continue and a profit could be made from trading accordingly. Thus, buyers stepped in to stage a short squeeze, and shares went up from there.
In addition, others may be encouraged by the recent announcement of a planned streaming video service to go along with the Truth Social app.
Fighting the Short Sellers
Indeed, issues of short selling might be a bigger part of things than expected. Trump Media, for its part, recently released a guide to shareholders that would help prevent their shares from being loaned out for short-selling purposes. The guide advises shareholders to “opt…out of any securities lending program” or “hold…them in your retirement account.” The guide even includes a form letter that shareholders can send to their broker of choice to make shares unavailable for lending activities like short selling.
Is DJT Stock a Good Buy Right Now?
A look at the last five days of trading for DJT stock reveals something downright shocking. For the first time in a while, shares are in the green for the period. Granted, it’s just a comparatively slender 2.78%, but after several days of open decline, any gain is a good one, as far as current shareholders are likely concerned.
