Don’t forget wrapping fish and lining a birdcage.
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So, the folks who bought into a pump-and-dump scheme are afraid that [expletive deleted] will take a dump on them.
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The most damning “problems” are the most basic facts of its existence - that it has no users to speak of, makes next to no money (and that amount is declining), the (inflated) operating costs are many times the revenue, and there’s a huge amount of debt to pay off. (I’m really curious about how the company ended up with so much debt - it’s not like setting up a Mastodon instance for almost no users is costly. Which means it was yet another layer of grift, somehow.)
It’s definitely what happened with the company “merger” (i.e. when mysterious unknown persons set up a shell corporation to buy Truth and pretend they merged).
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An interesting thing about that test is that it turns out that toddlers from privileged backgrounds are more likely to hold out for the 2 sweets. It’s proposed that poorer children get used to grabbing what they can straight away, because they have learnt to have no confidence there will be more later.
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It also includes 36 million in “earnout shares,” which may be issued to Trump depending on how the stock performs over the next three years.
I think there are prawn sandwiches with longer life expectancies than this stock.
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Did they factor in the weather outside?
If you can grab your one marshmallow now and get outside on a nice day for 15 minutes, it might be a reasonable tradeoff.
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A plump and dump.
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Is that how it works? My knowledge of stock sales is zip. You don’t simply say, or push the button on the computer, and say “sell my million shares for current share price”? I’m guessing there must be buy orders or some similar sounding word? Is there a way to check what the current glut of waiting purchasers have as a price point?
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Not where we can see them, no. Obviously the exchanges have this information, but they’re forbidden from using that data to trade on.
Things get even hairier when “payment for order flow” comes in, though. Non-exchange entities can and do take buy and sell offers and match them with each other, and since retail investors are close enough to random number generators they can be modeled as a gas, it can be lucrative to match a buyer offering $1.03 with a seller asking $1.00, give the buyer a better price at $1.02, give the seller a better price at $1.01, and keep the extra penny for yourself.
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Exactly right. The Market Maker has to find a Chump to receive the Pumped Dump.
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There’s the bid and ask price which can help to indicate if there’s enough liquidity and volume in the trading to accommodate an order fill -
But in very basic terms, a holder of a stock wanting to sell shares submits a sell order which can only be filled if there are enough buyers willing to purchase those shares at the price offered. Otherwise the order goes unfulfilled or the seller resubmits a new offer at a price low enough to attract a buyer. (There are lots of other types of sell orders - limit, conditional, stop loss, fill or kill, etc. but they are just variations of different selling strategies).
There also has to be enough trading volume to support a massive share dump so Trump’s going to have to dribble out small chunks of shares over time (all the while watching the price go lower and lower each day) or risk crashing the price to the basement by trying to dump all of the stock at once.
Trump’s biggest impediment from cashing out is volume. He currently owns 78.8M shares (with another 36M shares coming to him later this week). DJT’s average daily trade volume right now (at peak hype) is only around 7M shares/day. Even if/when he were to try dumping all 114M shares it would take at least two weeks to clear the sale at it’s current trading volume. Fast forward 6 months when the lockout period is lifted and after (hopefully) losing the election (again) and he’ll be holding a lot of worthess paper that he can’t sell at any price.
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Just like the bibles being bought (by churches, eh?)
I thought the political standard these days was a lettuce. (But yeah, this is high finance - /s -not politics.)
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Thanks! That was simple enough for me to understand clearly.
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Edit/Update: @mmascari posted a Yahoo chart below which appears better. Note that the y axis on both charts starts at a number that is not zero, and will vary as prices move up or down.
Here is a link to Google Finance’s chart for DJT:
I’ve set it for 6 months for the big picture (and perhaps confusingly shows a gain from the stock price pre-merger). Note that you can easily choose different time scales; 1 day, 5 days, 1 month etc.
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You can set the Yahoo Chart to a specific date range to start with 3/25 when the merger completed and it started trading as DJT instead. It also lets you see the volume of trades each day.
Typically under 5 million in daily volume outside two spikes the first week over 10 million volume. If he dumps 100+ million shares all at one time, it’ll drive the price to 0. Even if he tries to do 10 or 5 million a day, it’ll probably drive the prices to 0. He might be able to get away with selling 1 or 0.5 million in a day, but repeating for a bunch of days is going to have the same effect of driving the price to 0.
Can he sell the shares privately not on the market?
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Yes, publicly traded stock can be privately sold and transferred. The mechanism is to have the stock issued in his name (it usually just sits in a pool ‘owned’ by the stock trading company) and then printed, so he have actual stock certificates, which he can then countersign like they were checks, and transfer the physical media to the new owner for whatever compensation has been agreed upon. There’s probably a purely electronic version as well, but it most likely follows the same methodology.
Of note, especially given a certain individual’s reputation and pending litigation on such matters, the IRS pays very close attention to such transfers, and will tax as a ‘gift’ any significant discrepancy between the sale price and the market price. So if a Saudi prince gives an ex-president $100/share for 100,000 shares when the trading price is $0.15, he’ll have to pay the appropriate taxes on the difference, at least in theory.
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I was thinking more like a Saudi prince gives him the current market prices for all 115 million shares without actually having to put them through the market process. That avoids flooding the market with shares driving the price down and avoids a huge buy order on the market driving the price up. They don’t even need to inflate the price at all, just do the transaction in a way to avoid the transaction causing the market price to move.
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Such transfers especially among principal shareholders must be reported and disclosed by the company. Such are the pitfalls of being a publicly traded company.
Something like that would be sure to get noticed and would definitely still drive the price down.
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