Macquarie Group has become the first major Australian institution to publicly disclose a stake in Trump Media & Technology Group (TMTG), the social media company largely owned by former US President Donald Trump.
In its latest quarterly filing with the US Securities and Exchange Commission (SEC), Macquarie reported holding 25,000 shares of TMTG as of June 30. At that time, this stake was valued at approximately $800,000 USD, equivalent to $1.2 million AUD.
This disclosure marks a significant event as Macquarie is the first asset manager based in Australia to reveal such an investment. Trump Media & Technology Group, which went public on Nasdaq in March following a merger with special-purpose acquisition company Digital World Acquisition Corp, has become a barometer for Trump’s electoral prospects. The share price of TMTG has fluctuated with Trump’s political fortunes, rising with his presidential campaign’s momentum and falling as his chances diminish.
A spokesperson for Macquarie explained to The Australian Financial Review that the disclosed stake was held for only four days, intended solely for managing a client-initiated transaction. “When a client requests a long equity derivatives swap position in a listed equity, Macquarie hedges its exposure by purchasing and holding shares against the long swap written for the client,” the spokesperson said. The holding was sold off once the client exited their position.
TMTG’s stock performance is closely tied to Trump’s electoral prospects. Trump, who holds a 57% stake in the company, has been restricted from selling his shares since the company’s March IPO, although this restriction is set to expire soon. His initial investment of a few million dollars has appreciated significantly, with his stake now valued at $2 billion USD ($3 billion AUD).
Despite the initial surge, the stock has seen a significant decline of over 70% from its peak in the first week of trading. A brief rally in July, following an assassination attempt on Trump, boosted the stock by 30% in one session, but the shares have since fallen as Kamala Harris gained ground in the polls after President Joe Biden’s withdrawal from the race.
As of now, the value of Macquarie’s June 30 stake has diminished to approximately $451,000 USD ($780,000 AUD). The disclosure of Macquarie’s position came shortly after TMTG was included in the Russell 3000 and Russell 1000 indices. This inclusion triggered buying by major passive investment funds such as BlackRock, Fidelity, and Vanguard, which track these indices to align with the benchmark’s performance.
Additionally, ETF provider Global X has also reported holding shares in TMTG through its social media ETF, alongside stakes in other platforms like Facebook-parent Meta and Spotify.
