Austin Private Wealth LLC (APW), an investment firm based in Austin, Texas, is facing intense scrutiny after it purchased “put options” on 12 million shares of Trump Media & Technology Group (NASDAQ: DJT) the day before the assassination attempt on Republican presidential candidate President Donald Trump. DJT is the parent company of Truth Social, Trump's own social media space that was founded in 2021 after he was booted from what was then known as Twitter.
“Put options” are closely related to short selling strategies, where you buy a stock and have the option to sell it later at the same purchase price. This is often used when an investor sees that the value of a stock may fall soon, allowing the option holder to sell the stock at a higher price and pocket the difference.
Why short sell?
Ultimately, the assassination attempt led to a rise in the value of DJT, which was trading at $31.25 the day before the shooting and rose to a high of $46.17 before stabilizing. As of this writing, it is trading at $34.48.
Had the assassination attempt been successful, DJT would almost certainly have been hit hard, as Trump is the most prominent person to use TruthSocial. Austin Private Wealth removed the put options on July 16, the business day after the assassination attempt. The firm claims the options were purchased in a clerical error, saying in a press release on Wednesday:
The SEC filing indicating that Austin Private Wealth had significantly shorted shares of Trump Media & Technology Group (DJT) was incorrect, and we corrected the error as soon as we learned of it.
APW's clients do not hold, and have never held, the amount of put options on DJT originally reported. The correct holdings are 12 contracts, or 1,200 shares, not the 12 million shares that were erroneously submitted. When submitting the required report for Q2 2024, a multiplier was applied by our third-party vendor that increased the share count for all option contracts (not just DJT) by 10,000 times. We were not aware of this error prior to approving the submission.
We deeply regret this error and the concerns it has raised, especially during this difficult time for our nation. We are committed to full transparency and maintaining our customers' trust. As such, we are reviewing our internal procedures and the processes we use with third-party vendors who assist us with our SEC filings to better understand how this issue occurred and to work to avoid similar issues in the future.
Some have speculated that the investment giant BlackRock was behind APW's massive put purchases, a suspicion fuelled by the revelation that the shooter, Thomas Matthew Crooks, had appeared in BlackRock advertisements.
Past suspicious activity
For many, the large purchases of put options were reminiscent of similarly suspicious trading activity prior to the terrorist attacks of September 11, 2001. On September 10 of that year, large amounts of put options were purchased against American Airlines (AA) and United Airlines (UAL), spurring speculation that someone may have had advance knowledge that the airlines' planes would be hijacked prior to those attacks.
Further fueling the conspiracy theory that the stock market was predicting major events are large investments in Pentagon shares just before the October 7 attacks on Israel, and large stock sales by US politicians just before COVID-19 was declared a pandemic.
It's probably true that when something like the assassination attempt on former President Trump happens, people turn to conspiracy theories for answers, but stories like this, coupled with Secret Service Director Kimberly Cheatle's inability to explain certain aspects of the security failings surrounding the incident, naturally lead to such speculation running rampant.
