NEW YORK (Reuters) - Investors betting against Trump Media & Technology Group (DJT, DJTWW) have lost $420 million since the stock began tracking the election odds of Donald Trump, according to a report released on Wednesday by financial analytics firm S3 Partners.

Republican Trump, 78, recaptured the White House on Wednesday with a sweeping victory over Democratic candidate Kamala Harris.

In the six weeks leading up to Trump's win, Trump Media shares surged 196%. The stock was down over 8% in premarket trading on Thursday, after rising in the wake of the Republican's win.

The stock, alongside online gambling sites like Polymarket and Kalshi, became something of a proxy for Trump's reelection chances.

With its heightened volatility, short interest, lack of earnings and loyal following of retail investors, DJT "checks the boxes as a meme stock," S3 said.

Trump Media & Technology Group operates Truth Social, a social media site and streaming service. Trump himself is the company's biggest shareholder.

The stock's fervent following of Trump supporters vow the same never-sell mentality, sometimes referred to as "diamond hands," as holders of cryptocurrencies.

On Tuesday night, hundreds of the stock's fans gathered in an election-watch party on online video-sharing platform Rumble. There, they toggled between the stock's share price, Trump's odds on the election gambling site Polymarket and the election results.

The week before the election, trading of Trump Media shares was halted several times as the shares surged up and down in a chaotic frenzy.

S3 said the stock has become highly volatile and, due to reasons including significant interest by short sellers, a relatively small number of shares available for trading and substantial losses for short sellers, it is at risk of a "short squeeze." That refers to a stock's rapid rise forcing short sellers to buy back shares to cover their positions, further driving up the stock price.

On Wednesday, the day Trump won the election, short sellers faced a loss of 14 million shares, at $5.50 per share, or $77 million, the report said.

"With a crowded short position and increased volatility, DJT remains a unique post-election focus for market participants," the report stated.

The company added that the stock should normalize closer to Trump's inauguration in January.

The biggest beneficiary of the stock's ascent has been the president-elect. Since March, Trump has seen his stake in the company rise as high as $5.2 billion, according to Reuters calculations. On Wednesday it was worth $4.1 billion.

(Reporting by Michelle Conlin in New York; Editing by Matthew Lewis)