Trump Media & Technology Group’s (NASDAQ:DJT) special purpose acquisition company (SPAC) merger closed on March 26 with shares surging to as high as $79.38. However, it has all been downhill from there, as DJT stock now trades in the high $30 range. That’s bad news for former President Donald Trump, who owns 57.3% of all shares outstanding.
The decline doesn’t come as a major surprise. For the 12 months ended Dec. 31, TMTG only generated revenue of $4.13 million while its net loss was $58.18 million. In 2022, revenue was $1.47 million with net income of $50.52 million, which was attributed to a $75.80 million gain on the change in fair value of derivative liabilities.
Either way, its irrational for any company with less than $5 million of revenue to trade above a $1 billion market capitalization. DJT’s market capitalization is currently around $5 billion. Its revenue implies a trailing price-to-sales (P/S) ratio of over 1,200x. For comparison, the S&P 500 trades at a trailing P/S of just 2.8x.
Short sellers have taken notice as well. Last week, DJT stock carried a high short interest of 12.6%. At the same time, shorting the company has been difficult due to high demand, which has led to a cost to borrow (CTB) fee above 200%.
The 5 Biggest Buyers of DJT Stock
Tracking institutional activity is important, as these large investors provide liquidity and support for stocks. While the TMTG merger closed during Q1, it previously traded as DWAC stock before that.
During Q4, a total of 123 13F filers disclosed a stake in DWAC, an increase of four filers from the prior quarter. However, the number of shares owned by these filers increased by 30.75% to 1.59 million.
Hedge funds, a subset of 13F filers, were even more bullish. Total hedge fund ownership increased by 184.43% to 473,609 shares from 166,514 shares. These shares are split among eight hedge funds, up from six hedge funds.
With that in mind, let’s take a look at the top buyers of DWAC during Q4:
- ATW SPAC Management disclosed its entire stake of 150,000 shares during Q4.
- Sapient Capital disclosed its entire stake of 145,569 shares during Q4.
- Atika Capital Management added 139,937 shares, bringing its stake to 249,499 shares.
- Buckingham Strategic Wealth added 19,848 shares, bringing its stake to 100,948 shares.
- Group One Trading disclosed its entire stake of 18,926 shares during Q4.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
