Trump stock shorted heavily day before assassination attempt

After an assassination attempt on former President Donald Trump, which sent shockwaves through the U.S. political landscape, Trump Media (NASDAQ: DJT) shares surged more than 60% in the early trading hour on Monday before retracing by 20% to the valuation of $36.89 at the latest close on July 16.

However, a fact bound to raise a few questions is that short positions against Truth Social stock doubled between July 1 and July 12, going from 7 to 15 million shares, in what was a record of shares shorted for DJT stock since its trading debut.

This surge indicates that individuals or large organizations anticipated a significant drop in the stock’s value by July 15, a scenario that would likely have materialized had President Trump died in Pennsylvania.

DJT stock short-interest history. Source: Fintel

The potential need to cover the losses from short positions leading up to July 12 could have provided an additional boost in the price of DJT stock.

A pattern raises concerns that some individuals may have had foreknowledge of a plot against former President Trump’s life and sought to profit from the expected turmoil. 

Short interest in DJT stock

Looking at the current level of DJT stock short-interest, it has subsided substantially. It fell to 11.27%, with 5,219,586 shares being shorted at an average coverage of less than one day.

DJT stock short interest level. Source: Fintel

This means that the stock is no longer experiencing high short interest, as it did last week.

Previous occurrences of short interest before major events

A similar occurrence was observed on September 11, 2001, when substantial bets were placed against the stocks of major airlines, American Airlines (NASDAQ: AAL) and United Airlines (NASDAQ: UAL), the day before the attacks. 

Subsequent investigations revealed that a single entity and an insider newsletter had tipped off investors, leading them to place fortuitous bets against the top two U.S. airlines, which suffered significant losses following the hijackings.

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