Mr brolin wrote: ↑Tue Apr 02, 2024 4:42 am
WUT.....?
In the SEC filing......
In a filing on Monday, TMTG’s management said that “adhering to traditional key performance indicators, such as signups, average revenue per user, ad impressions and pricing, or active user accounts including monthly and daily active users, could potentially divert its focus” away from growth
Not like any of my former colleagues and competitors would have signed up to write stock research on this turd, but a company in social media that doesn't put out audience metrics is never going to get professional investors to consider buying the stock. Of course, all Fogbowsers have figured this out already and don't need me to point that out, but I thought I'd say it for the record.
It's almost like the management is telling institutional investors to stay away. But in doing so, they're missing an opportunity to restrict the "float," the number of shares that trade on the open market. I haven't looked at the filings, but before the six-month lockup prohibiting Trump from dumping his shares expires, typically, only a small percentage of company shares is available to buy or sell on an exchange. In an IPO, that's typically around 20% of the total number of shares. I don't know what the float is for a SPAC (a.k.a., a reverse shell) deal like this, but it's probably similar.
If you have a recent offering that's dropping like a dead cat and you can't prop it up because of the relatively small float, then you'd want to have some institutional investor presence in the deal, because regular mutual funds would tend to buy and hold to be tax-efficient. That would reduce float still further. Let's assume that the float on this deal is 20%. If it were a quality deal, you could expect institutions to hang on to a chunk of that, say 10% of the total shares out (or half the float). That would increase competition from individual investors susceptible to all the hoopla around the deal, and would push the price higher or at least damp out the move to the downside. But saying you're not going to publish common metrics absolutely guarantees no institutional participation...
Too, also, hedge funds that might otherwise play the stock on the short side will see the lack of metrics as an opportunity to wade in and short the stock, or to buy "put" options on it (i.e., betting that the stock will go down). There are restrictions on shorting a stock in the first 30 days after an IPO, but they don't seem to apply to a SPAC after it does its merger. So the hedge funds with an appetite for fun in a small part of their holdings can short this. There have already been several articles about how they're doing this.
A lot of people have a negative impression of short sellers, thinking that they are somehow doing something naughty. It turns out that having a "symmetric" market, where buying long or short positions in a particular security, is actually very helpful. Most importantly, investors on the short side will step in to buy at some point to close out their positions, theoretically when a stock has dropped so far that it is selling at or below its tangible asset value. And that provides support to stop stocks from going to $zero in a never-ending death spiral. But I'm sure all the hedgies that are short DJT know full well that there is absolutely no asset value to the company, so they're probably going to short it to zero, because a) that's what the stock is actually worth, and b) so they can brag that they actually "shorted it to zero," a slang expression that rarely, if ever, actually happens.