DJT Short Squeeze Could Push Stock To $60 If Trump Wins, But Analysis Says Loss Could Make Shares 'Worthless'

Shares of Trump Media & Technology Group DJT have surged over the past month, with new data indicating the potential for a short squeeze leading up to the 2024 presidential election.

What Happened: Since going public after a long-awaited SPAC merger, Trump Media & Technology shares have been highly volatile due to events surrounding former President Donald Trump and the 2024 election.

A new report from S3 Partners shows that the stock's recent moves are closely tied to Trump's odds of winning the 2024 election, based on polls, prediction markets, and political experts.

"With the election nearing, options markets expect up to a 50% price move," S3 Partners writes.

Trump is the largest shareholder, owning around 57% of the company. However, S3 Partners said only around 40% of shares are floated, creating an increased chance of a short squeeze.

"Trump's 57% stake and current short losses intensify squeeze potential."

Benzinga reached out to Trump Media & Technology Group for comment on the S3 Partners report.

S3 Partners shared a chart showing DJT's stock price movement related to Trump's increasing election odds.

"DJT currently serves primarily as a proxy for the election, although its valuation is influenced by other factors as well."

Around 14.5 million DJT shares are shorted, representing 17% of the float, S3 Partners said, based on data from Friday.

"This short interest has increased as the stock price has risen."

DJT stock scored 100 for short squeeze risk throughout October, which represents a "crowded short position," S3 Partners said.

"This score reflects a crowded short position of 50, stemming from the large, short interest relative to the small float, combined with recent stock returns."

S3 Partners estimates that investors who have shorted 14 million shares of DJT stock have lost around $322 million.

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What's Next: With less than one week until Election Day, DJT stock is likely to see increased volatility, with the potential for the stock to trade higher if Trump wins or sell off if he loses.

S3 Partners lays out the case for shares to go higher based on the increased short squeeze potential and the options market’s implied move of 50%.

"The model suggests a $60 increase in stock price," S3 Partners said. "It indicates that if Trump were the win, there could be a substantial upward movement in DJT, potentially triggering a squeeze."

S3 Partners said the same model suggests that DJT stock "could become worthless if Trump were to lose."

Tuesday's Election Day will likely see DJT stock as one of the most talked-about financial news stories. The big question will be whether the stock continues to trade as a Trump proxy after the election results have been decided.

DJT Price Action: DJT stock was down 18% to $42.04 on Wednesday. However, it has increased 21% over the last five trading days and over 162% over the last month.

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