The $175m bad bond problem looms. This Indicator
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Posted On: 04/11/2024 5:39:30 AM
The $175m bad bond problem looms.
This Indicator on Trump's Stock = Further Collapse!
Story by Jordy Meiselas • 16h • 3 min read
MARKETS TODAY
INX
▼-0.95%
DJI
Dropping fast
COMP
▼-0.84%
The borrow fee on DJT shares (for selling short) continues to fall. Current quote is below 150%. Let's be clear, that is still insanely high and usurious, but it is what it is. It’s a market rate set by supply and demand.
DJT is now trading at $35.50 per share, which is 10x to 100x what it is worth in any rational evaluation. Ditto about supply and demand.
If the borrow rate is a leading indicator of the stock price, DJT is headed into the $20s, on its way lower.
The “lower” borrow fee for shorting DJT is down from peak/panic rates of 600% to 800% just a few days ago. A speculator hoping to “farm” DJT stock and collect borrow fees to offset the risk will now receive about 50%-67% of the 150%, lets call it 100%. That is less than .33% of the equity value of the position per day. That’s below 10c per day per share -- a very poor risk/reward given the weakness of the DJT shares in the market now that the novelty and volatility has worn off.
In a rational world, we could expect DJT to drift lower as this trade unwinds. The $175m bad bond problem looms. It seems Hankey loves his money more than he loves the Dystopian-in-Chief (“DiC” herein).
This Indicator on Trump's Stock = Further Collapse!
Story by Jordy Meiselas • 16h • 3 min read
MARKETS TODAY
INX
▼-0.95%
DJI
Dropping fast
COMP
▼-0.84%
The borrow fee on DJT shares (for selling short) continues to fall. Current quote is below 150%. Let's be clear, that is still insanely high and usurious, but it is what it is. It’s a market rate set by supply and demand.
DJT is now trading at $35.50 per share, which is 10x to 100x what it is worth in any rational evaluation. Ditto about supply and demand.
If the borrow rate is a leading indicator of the stock price, DJT is headed into the $20s, on its way lower.
The “lower” borrow fee for shorting DJT is down from peak/panic rates of 600% to 800% just a few days ago. A speculator hoping to “farm” DJT stock and collect borrow fees to offset the risk will now receive about 50%-67% of the 150%, lets call it 100%. That is less than .33% of the equity value of the position per day. That’s below 10c per day per share -- a very poor risk/reward given the weakness of the DJT shares in the market now that the novelty and volatility has worn off.
In a rational world, we could expect DJT to drift lower as this trade unwinds. The $175m bad bond problem looms. It seems Hankey loves his money more than he loves the Dystopian-in-Chief (“DiC” herein).
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