Why Was A Major Bet Placed Against Trump's Truth Social--Not Long Before The Assassination Attempt?
First a hat tip to commenter Amanda R, who sent me a link to a piece by Igor Chudov (many readers may be familiar with Chudov’s work). The “bet”—a short position—could have been coincidence, but the size and timing are, well, eyebrow raising. This was not your average, ‘Hey, I’ll betcha five bucks!’ transaction. First, a picture helps us get the idea:
A Huge Financial Bet Against Donald Trump's Company Was Made Before the Assassination Attempt
Must be a coincidence, right?
So, Austin Private Wealth, LLC, is certainly not the only group betting against Truth Social. However, a glance will show that Austin’s position dwarfs all others—combined. Also, the other shorts appear to all have come earlier than Austin’s—the exact dates are unclear (see Igor’s explanation, below). Off the top of my head I’m not sure what may have sparked that activity, but Austin’s move coming later is—to my mind—a bit counter intuitive. After all, nobody else was betting that big, and certainly not as we approached summer. Hey, if I were some financial genius I’d be rich, which I’m not—maybe these geniuses at Austin Private Wealth, LLC, were on to something. But what?
Igor helps us out a bit as we try to grapple with the implications:
So, on July 12th, a day before the assassination attempt, Austin Private Wealth reported a short position nominally equivalent to 12 million shares. It is huge: it represents approximately one-seventh of Trump’s ownership in the same company, or 16% of all available stock float not held by major insiders.
Is that a big deal? For my nonfinancial readers, here is a little introduction to puts. Austin Private Wealth's position is in put options. Puts are financial instruments whose holder receives a payment if the underlying stock falls below the agreed price (the strike price) by a certain date. In such a case, the put option holder receives the difference. The more the stock falls, the more the put holder gains.
The standard American contract size is 100 shares, so Austin Private Wealth held approximately 120,000 put options, exposing it to potential gain linked to 12,000,000 shares of $DJT.
A sudden demise of Truth Social’s central figure, Donald Trump, would make the DJT 0.57%↑ stock worthless, making Austin Private Wealth a beneficiary of a gigantic payoff. Depending on the strike price, it could be a couple hundred million dollars.
What do we know about this odd financial bet? One thing to note is that it was made sometime before it was reported on the 13F filing: form 13F must be filed after the end of the quarter, and in this case, refers to the position as of the end of the second quarter, or 6/30/2024.
Austin Private Wealth is a money management firm catering to well-off individuals. Therefore, it is possible that the idea of initiating an unusually large put position belonged to one of its clients or just one money manager. Here’s the picture of their top managers, so you can play a guessing game of which of them possibly came up with this idea:
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It is also plausible that this extremely unusual position is a coincidence. There are many reasons why TruthSocial does not have a bright long-term future. However, the timing of this unusually large put option purchase raises some questions. Had the assassination succeeded, Austin Private Wealth would have reaped a windfall! The only reason Trump is alive is that he turned his head away in the last split second.
I am not new to options trading and made some money from Moderna puts that I purchased in 2021. People buy and sell options for all kinds of reasons. However, Austin Private Wealth held a position far beyond the size of typical speculative put positions.
What do you think? Is a giant put position, which would benefit from a sudden drop in DJT stock, initiated so close to the assassination attempt, just another unrelated coincidence?
To recap. Presuming that I’ve understood Igor’s explanation, the other bets against Truth Social look like they were placed in the first quarter of 2024 (reported mid-May), or possibly early in the second quarter? Austin’s huge bet—in relative terms—was placed in the second quarter and reported two weeks after the end of the quarter. Potentially, close to the assassination attempt. With Trump cruising to the GOP nomination and Zhou struggling—to put it mildly—Truth Social’s prospects would, to most eyes (judging from the amounts of the other short positions), have appeared not so bad as to warrant what looks like a very lopsided, counter intuitive bet. At the least, this looks unusual. As Igor also notes, we can’t be sure just from this financial report who was behind this. A private individual who was in the know, somehow? A money manager at Austin? One way or another, it sure looks like a relevant investigative lead. I know that I, back in my working days, would have been all over this.
Perhaps some financially savvy readers could help us out?
Just a quick comment on the timing of the filing. To be crystal clear, the 13F filing is an end of quarter report for regulated investment entities. Those puts (however many were purchased) were accumulated from 4/1 to 6/30.
Second, the screen shot doesn't give us any of the critical details of the put - the strike price and the expiration dates being most important. If these were deep, out of the money puts, then the effective shares short is much smaller than if these were at the money or in the money puts (option deltas describe the sensitivity of an option price to a change in the underlying and for money managers. Out of the money options are less sensitive than in the money, all else equal).
Finally, I can't tell from the screenshot whether this purchase was to hedge a long position (i.e. the fund bought insurance to protect an investment) or was in some way a derivative play on some other risk factor.
In short, from the solo screen shot, it is impossible to suss out a motive with any confidence
Majority of Austin Private Wealth LLC, is held by George Soros’ Vanguard and BlackRock. Same characters bet against the 2 airlines day before 911. The world is waking up.