Trump media short positions surged by 31%, and after merging with TAE, the shareholding dropped from 40% to 20%

2026-01-04 07:55:47

Trump Media & Technology Corp (DJT) is facing a dual pressure from the market. On one hand, short positions have recently surged significantly; on the other hand, the merger plan with Google-backed fusion company TAE is diluting Trump’s own control. The combination of these signals reflects deep market concerns about this deal.

Market Signals Behind the Increase in Short Positions

According to the latest reports, data from financial analysis firm S3 Partners shows that Trump’s media company’s short positions have increased by 31% recently, reaching nearly 16 million shares, the highest level since October. An increase in short positions typically indicates investor expectations of a decline in stock price or concerns about the company’s fundamentals.

Why are shorts increasing?

While the news brief does not specify the reasons directly, considering the timing, it is closely related to Trump’s media company’s announcement last month of a $6 billion all-stock merger plan. The market may be digesting the following factors:

The risk of equity dilution from the merger
Uncertainty about TAE’s technological business prospects
The potential impact of Trump’s personal control weakening on company decision-making
The all-stock transaction means no cash inflow

Equity Dilution: Trump’s Interests Are Damaged

This is the most noteworthy part of the deal. According to data, Trump personally holds about 115 million shares of Trump Media & Technology Corp, currently accounting for approximately 40% of the company. However, once the merger with TAE is completed, due to equity dilution, Trump’s shareholding will decrease to about 20%.

Indicator	Before Merger	After Merger
Trump’s Shareholding Ratio	About 40%	About 20%
Control Level	Absolute Control	Relative Control
Voting Power Impact	Dominates Decision-Making	Restricted

This means Trump shifts from an absolute controller to a relative controller, representing a significant power change for any founder and major shareholder.

Why does the market view this deal as bearish?

From an investor’s perspective, several factors may lead to increased short positions:

The weakening of Trump’s control raises uncertainties in corporate governance
Fusion technology is still in early commercialization, with uncertain prospects
The all-stock merger may cause conflicts between Trump’s personal interests and TAE shareholders
Historically, many large mergers have been accompanied by short-term pressure on stock prices

Key Questions for Future Development

This event also leaves some unresolved questions. First, will Trump change the merger terms to maintain control? Second, will market bearish sentiment affect the progress of the merger? Lastly, once the merger is completed, how will the new company’s governance structure operate?

The answers to these questions will directly influence DJT’s stock price trend and investor confidence.

Summary

Trump Media & Technology Corp is at a critical turning point. The 31% increase in short positions reflects substantial market concerns about this $6 billion merger, while Trump’s shareholding dropping from 40% to 20% exposes the core risk of this deal—the transfer of control. For investors holding or considering holding DJT, the upcoming merger progress, market reactions, and Trump’s stance are worth close attention. This is not just a business transaction but a redefinition of Trump’s personal power and interests.

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