A major hedge fund has placed a substantial bet against former President Donald Trump’s media company, signaling growing skepticism from institutional investors.
Qube Research & Technologies (QRT), a London-based quantitative hedge fund, disclosed a short position worth approximately $105 million in Trump Media & Technology Group (TMTG) — the parent company of Truth Social.
The filing, made public in Germany’s Federal Gazette on Monday, revealed that QRT is shorting 2.5% of TMTG’s total outstanding shares.
The position makes QRT one of the first institutions to publicly declare a short position against TMTG since its listing.
According to Breakout Point, the research firm that first flagged the disclosure, this is QRT’s second-largest short position by percentage, and the first one involving TMTG disclosed to regulators.
The move appears to comply with Germany’s short-selling transparency regulations, which require investors to report short positions that exceed 0.5% of a company’s shares.
In response to inquiries, QRT stated that its trading decisions are model-driven and part of a diversified, quantitative long/short portfolio, adding that the firm does not make fundamental judgments about the companies it trades.
“Our positions are model-driven and do not reflect a specific view on the fundamentals of the company,” a spokesperson said in an email to Business Insider.
TMTG’s Troubled Stock Performance
The hedge fund’s bet comes at a challenging time for Trump Media. The company, which owns the conservative-leaning social media platform Truth Social, has seen its share price drop sharply in recent weeks.
Earlier this month, shares fell to a six-month low following a regulatory filing that revealed plans to allow Donald Trump and other insiders to sell shares.
Trump, who owns roughly 53% of TMTG, would be allowed to sell his stake under the new arrangement, potentially flooding the market with additional shares and pushing prices down further. TMTG has yet to issue a comment on the recent developments.
TMTG went public in March 2024 through a SPAC (Special Purpose Acquisition Company) merger with Digital World Acquisition Corp (DWAC).
The company’s market debut was fueled by excitement among Trump supporters and retail investors, briefly turning it into a “meme stock” — a term for stocks that surge in popularity (and often volatility) due to social media hype rather than financial fundamentals.
However, the enthusiasm has not lasted. Since its peak, the stock has plunged more than 80%, and is down 44% year-to-date. According to Nasdaq data, total short interest in TMTG stood at 4.9% as of Monday.
Understanding Short Selling
Short selling is a strategy used by investors who believe a stock is overvalued or likely to fall. It involves borrowing shares of the company, selling them on the open market, and then buying them back later at a lower price.
The difference between the sale and repurchase price becomes the investor’s profit. If the stock price rises instead of falling, the investor incurs a loss.
While controversial, short selling plays an important role in financial markets by adding liquidity and helping identify overvalued companies.
However, when heavily targeted, it can also increase volatility and public scrutiny, especially in politically sensitive companies like TMTG.
What Does This Mean for Trump Media?
The disclosure of a major short position by a respected hedge fund like QRT could put additional pressure on TMTG.
Though QRT says the move isn’t based on a specific view of the company, the timing suggests growing concerns about the company’s financial stability, governance, and long-term viability.
Adding to the uncertainty is the fact that Trump Media’s core product, Truth Social, has struggled to gain mainstream traction, with limited user growth and unclear monetization plans.
Despite being a high-profile platform among Trump’s base, it has yet to become a major player in the broader social media landscape.
As the 2024 U.S. presidential election approaches, Trump’s business interests are under increased public and regulatory scrutiny.
This short-selling revelation may not only influence investor sentiment, but could also become a political talking point in Trump’s ongoing campaign.
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