Investor Who Once Backed Short Selling Ban Considers Bet Against Trump Media: 'Biggest Pump And Dump Stock In History'

The Wall Street debut of Trump Media & Technology Group DJT has stirred a hot debate on the valuation of the company and how bets against the stock given its meme stock potential could be a bad idea.

An investor who previously supported a ban on shorting stocks could be ready to make an exception for Trump Media.

Calcanis Says DJT ‘Madness’: Trump Media & Technology Group (TMTG) made its public debut Tuesday, March 26 after completing a SPAC merger with Digital World Acquisition that was announced in October 2021.

After several delays and setbacks, TMTG is now a public company and has a valuation of around $10 billion.

Investors were rushing in on both sides of the trade to buy the stock as it became a hot topic on Reddit and circulated on social media as a meme stock. Investors paid high borrowing costs to short the stock or bought puts to bet on the stock falling in the future.

Entrepreneur and investor Jason Calacanis, who is known for holding early stakes in companies like Robinhood Markets HOOD, tweeted that he was considering shorting a stock for the first time.

"I've never shorted a stock, but I feel like this $DJT thing is madness…what's the best way to bet this thing goes down 50% in the next six months?" Calacanis tweeted.

The investor said that the company would be worth between $75 million to $150 million if it's doing $3 million in annual revenue based on a seed round or Series A investment of 25x to 50x the revenue.

"This is the biggest pump and dump stock in history…and I could see it going higher from here!!!! Predict 1m+ Trump supporters might buy $1,000+ each just to show support WHILE playing the pump and dump game."

Calacanis tagged the Securities and Exchange Commission and its Chairman Gary Gensler in his post, saying they are probably "watching this one like a hawk."

The investor was previously critical of Trump's Media company when discussing the SPAC merger in October 2021 on the "All-In Podcast," which he co-hosts.

"Donald Trump has done a SPAC. It's become a bit of a meme stock on WallStreetBets."

The investor said TMTG has no technology, no team, no IP and no office.

Related Link: EXCLUSIVE: Trump Media Company Goes Public, Financial Experts Say DJT A ‘Meme Stock’ — ‘This Is Going To Be A Way To Bet On Or Against Trump’

Calcanis On Short Sellers: The comments to Calacanis's post on shorting Trump Media saw several call-outs on valuation and the meme stock potential.

One user also flagged Calcanis’ previous comments in opposition to short selling.

"1. I'm on the side of retail when it comes to the short battle 2. I think shorting should be banned," Calacanis tweeted in January 2021.

Calacanis, who was an early investor in Robinhood, was interviewed by CNBC in January 2021 when the stock broker was involved in a battle of retail traders versus short sellers and hedge funds betting on or against GameStop.

The investor said at the time that no brokerage could handle the kind of unprecedented volume.

"RH created the movement, they will weather this storm & be stronger!"

Calacanis also spoke out about the high valuation of Oatly Group OTLY in 2022, saying he was considering shorting the stock.

One user replied to Calcanis’ post about DJT: "Haha say you never seen a meme coin or stock without saying you never seen a meme coin or stock.”

Another user told Calacanis the No. 1 rule of shorting stocks is "never short a meme stock."

"Just ask Gabe Plotkin how that goes. You can be right and still lose," the user said, referencing the Melvin Capital founder who bet against GameStop Corporation GME.

DJT Price Action: Trump Media & Technology Group shares are up 2% to $67.35 versus a 52-week trading range of $12.40 to $79.38.

Read Next: Trump SPAC Is Up 250% In Past Year: Why Marjorie Taylor Greene Is Losing On The Trade

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