I’ve been meaning to write a primer about why Trump Social dropped like a stone to roughly $22/share, then rebounded to $36 on Friday with no improvement in financial results or prospects.

Basically there was a massive short squeeze. Let me explain.

Shorting stock is making a bet that it will go down. Instead of buying it, you sell it at a price without owning it. In most cases, you get charged by a broker for borrowing the underlying stock. If a short is very popular, that cost can be high.

Trump came out blazing midweek, saying there was naked short sellers. That means people sold stock without borrowing the underlying stock. Trump owns 60% of stock outstanding. He said he would not lend out his share and encouraged his followers to do the same. This immediately caused shares to get called in, and short covering - meaning short sellers being forced to cover their bet by buying stock (hence forced buying and price goes up).

But here’s the other rub: it is NOT illegal to naked short. The SEC notes on its website that naked short selling is not “not necessarily a violation of the federal securities laws” unless it is being intentionally deployed to manipulate the market.

By Friday, the genius CEO Devin Nunes was claiming market manipulation (without grounds).

Bottom line: this stock will find its value once the dusk clears. And that is lower. But it will take some time since Trump controls 60% of the float.

Hope this makes sense. Will try to answer your questions as time allows.