SARASOTA, Fla. - Trump Media & Technology Group Corp. (NASDAQ: DJT), commonly known as TMTG, has issued guidance to its shareholders on steps they can take to prevent their shares from being used in short selling activities by brokerage firms. The company, which operates the social media platform Truth Social, has a shareholder base primarily composed of retail investors, many of whom support TMTG's mission to counter Big Tech censorship.
TMTG highlighted that brokerage firms may lend out shares held in margin accounts to institutional investors for short selling, a practice where investors bet on the decline of a stock's price. While brokerage firms and short sellers may profit from a drop in the stock's price, retail investors do not see such benefits. To safeguard their investment, TMTG suggests shareholders take specific actions:
1. Hold DJT shares in a cash account rather than a margin account to prevent them from being lent out.
2. Opt-out of securities lending programs offered by their brokers.
3. Transfer their shares to a Direct Registration (DRS) account with the company's transfer agent, Odyssey Transfer & Trust Company, which allows for electronic holding of shares or the issuance of physical stock certificates upon request.
The company also referenced a June 10, 2021, Investor Bulletin by the Securities and Exchange Commission (SEC), which warned about the risks associated with securities lending by brokerage firms. These risks include the potential for shares to be lent out without notice or compensation to the investor, affecting the investor's voting rights and tax treatment if they have an outstanding margin loan.
Moreover, TMTG cautioned shareholders that transferring shares out of brokerage accounts could incur costs and result in less liquidity, as selling the shares might take longer if held in DRS or physical certificate form. The company also clarified that the information provided should not be considered investment advice and urged investors to consult with financial advisors to ensure the appropriateness of such strategies.
InvestingPro Insights
Investors in Trump Media & Technology Group Corp. (NASDAQ: DJT) have shown resilience amidst a fluctuating market, as evidenced by recent performance metrics. While the company's stock experienced a modest dip in the short term, with a 1-week price total return of -0.14%, it has managed to maintain a positive trajectory over a longer period, boasting a 6-month price total return of 6.92%. This suggests a sustained confidence in TMTG's prospects and the value investors place in its mission against Big Tech censorship.
Despite a year-to-date (YTD) decrease of -4.24% in price total return, the 1-year price total return stands at a solid 5.63%, indicating that TMTG's shares have recovered from earlier setbacks and are now performing better than they were a year ago. This performance may be of particular interest to retail investors who are considering TMTG's advice on how to handle their shares in light of potential short selling activities.
With an average daily volume over the last three months of 109.07 million, liquidity seems to be ample, which is an important factor for shareholders considering transferring their shares to a Direct Registration (DRS) account. This liquidity, paired with the recent share price of 15083.72 USD, provides a snapshot of the company's current market presence.
InvestingPro Tips suggest that investors looking to align with TMTG's strategy should monitor these performance metrics closely. For those seeking additional insights, InvestingPro has 27 more tips available, which could further guide investment decisions. Shareholders can make informed choices by staying updated with real-time data and expert analysis. To access these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.