(Bloomberg) -- Shares of Donald Trump’s media startup are one of the most expensive to bet against in the US. As a measure of how costly, one back-of-the-envelope calculation shows the stock needs to drop 12% over the next week for short sellers to just break even.

The way short selling typically works is investors who borrow shares to then sell the stock pay a fee every day until the short bet is covered, when shares are returned to the party they borrowed from. Sky-high demand to bet against Trump Media & Technology Group Corp., the parent company of Truth Social, pushed annual financing costs to borrow shares to a whopping 600%, up from about 100% just a few weeks ago, data compiled by S3 Partners show. 

To put it differently: A Trump Media short seller pays roughly 75 cents a day, including weekends, in fees. So with shares trading at about $45, an investor who sells the stock short would need to see shares fall about $5.25 per week — or about 12% at the stock’s current level — to stay out of the red.

Read more: Trump Media Is Now the Most Expensive US Stock to Bet Against

The lofty fees are partly due to the limited number of available shares to trade and the stock’s loyal retail following. Because short selling is a bet on the price to go down, the longer the position is in place the more shares must drop on a weekly percentage base in order to make a profit. Gains are also capped, since contrarian traders can only bet that the stock will fall to $0, while shares can skyrocket meaning losses are infinite.

So far this year, shorts have suffered mark-to-market losses of $121 million betting against Trump Media with shares up more than 150%. The mounting losses compare to a far less risky 5.7% return for the S&P 500 Index and the risk-free profits of having money in something like a high-yield savings account.

Read more: Trump Mastered The Art of the SPAC Deal. Cashing Out Is Harder

Trump Media’s $8.1 billion valuation has drawn criticism given it took in just $4.1 million in revenue last year and lost more than $50 million. Still, the difficulty to borrow shares to bet against the stock paired with the high fees has kept most professional managers away.

Its valuation and volatility are reminiscent of meme stocks like GameStop Corp. and AMC Entertainment Holdings Inc., which saw share prices soar as billions were added in market value in 2021 despite their struggling underlying businesses.

GameStop is now down 87% from a peak while AMC has cratered more than 99% and is selling shares to pay down its debt. Despite being correct, many short sellers were unable to turn a profit on their bearish meme stock bets because the stocks traded higher for longer than contrarian traders could afford.

In recent weeks, Trump Media has been imploring retail investors to make their shares unavailable to borrow. Trump Media’s Chief Executive Officer Devin Nunes, a former California Representative who left Congress to become CEO, has even written letters to Congress and Nasdaq Inc. Chair Adena Friedman in a push to combat so-called “naked” short selling.

Read more: Trump Media Ropes In Congress to Pursue Claims of Illegal Shorts

Trump’s stake ballooned to nearly 115 million shares last week when a so-called earnout was met, gifting insiders millions of additional shares. While the event dilutes current investors, and there’s a risk of further dilution from warrants, the majority of shares aren’t currently available for trading.

For the former president to capitalize on his vast paper wealth – Trump’s stake is worth some $5.3 billion — combating skeptics and keeping shares higher is critical. That’s because insiders can’t sell until September due to a lock-up period. However, their ability to cash in could be expedited if the company’s board waives or pulls forward the expiration of the terms, and an April 15 filing is deemed effective by the US Securities and Exchange Commission.

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