Trump Media & Technology Group Corp. (code DJT), a social media company owned by former U.S. President and "King of Understanding" Trump, has just been listed on Nasdaq through a backdoor merger, attracting a wolf pack of short-sellers. However, the cost of shorting DJT is high, and it has even become the most expensive short-selling transaction on Wall Street.

According to data from the analysis company S3 Partners, DJT is currently the most expensive stock to short in the US stock market, and the annualized financing cost of shorting DJT is as high as more than 150%. The stock's short interest (short intrest, which is the size of the short position and an indicator that reflects the extent of investors' shortness, the higher it is, the more short the stock is) exceeds $100 million.

However, DJT's stock price has the support of many die-hard Trump fans, and its amplitude is comparable to that of meme stocks. If you are not careful, short sellers may lose everything.

Ihor Dusanisky, director of predictive analysis at S3 Partners, told the media that part of the reason why the cost of shorting DJT is so high is that there are very few stocks that can be lent for shorting, and there are also many investors who are worried about DJT’s future. The trend is pessimistic:

Short-term short sellers are willing to pay a short-selling fee rate that is more than 200 times the average level of the US stock market and more than 300 times the level of Apple, which shows that many people are betting that DJT's stock price is about to fall sharply.

DJT’s poor fundamentals are also a key factor in attracting short sellers. After the stock was listed, its market value once exceeded US$9 billion. But as of September last year, DJT's net loss was as high as $49 million.

Still, current trades shorting the stock are losing money. Just last Tuesday, the stock soared 59%, causing short sellers to evaporate US$61 million in book profits that day. The total loss of DJT short sellers has reached US$158 million.

Generally speaking, it is difficult to short SPAC stocks that are listed through backdoor transactions because long-term holders of these stocks often hold small shares and the supply side is very tight. Investors often consider buying put options to hedge a more difficult short trade in order to obtain the same return.

The support of retail investors is also one of the key factors supporting DJT's stock price.

Even though it encountered various doubts during the listing process, DJT shares were still sought after by retail investors. Analysts predict that due to Trump's strong personal influence, DJT will become the norm like meme stocks, and its ups and downs will depend more on Trump's political prospects rather than the company's fundamentals.