Market Volatility: Trump Media & Technology Group Stock Plunges 10%
The stock market is experiencing a tumultuous week, and Trump Media & Technology Group (DJT) is no exception. On Friday, the company’s stock took a drastic 10% dive, capping off a week of extreme price swings and multiple trading halts. This dramatic decline comes just days ahead of the presidential election, which is likely to have a significant impact on the company’s fortunes.
A Wild Ride for Investors
Over the past five days, DJT’s stock has plummeted by approximately 20%, despite a brief surge at the beginning of the week. On Wednesday, the stock suffered its largest percentage decline, plummeting around 22%. This volatility has resulted in a staggering $4 billion loss in market capitalization since Tuesday, although the stock still remains more than double its September lows.
Election Outcome to Determine Stock’s Fate
One investor, Matthew Tuttle, CEO of Tuttle Capital Management, warns that if Trump loses the election, DJT’s stock could potentially plummet to $0. “It’s a binary bet on the election,” Tuttle explained, citing a “buy the rumor, sell the fact” trading strategy. Interactive Brokers’ chief strategist Steve Sosnick agrees, stating that DJT has taken on a life of its own, with its volatility mirroring the unpredictability of the election outcome.
Betting Markets and National Polls
Prior to this week’s sell-off, DJT’s stock had risen as betting markets and national polls shifted in favor of a Trump victory. However, these margins have tightened in recent days, with key battleground states like Pennsylvania, Michigan, and Wisconsin showing razor-thin margins. The company’s fundamentals have long been in question, with its second-quarter results revealing a net loss of $16.4 million and revenue of just under $837,000.
Trump’s Social Media Ambitions
Trump founded Truth Social after being banned from major social media platforms like Facebook and Twitter following the Jan. 6, 2021, Capitol riots. Although he has since been reinstated, Truth Social aims to take on the social media incumbents. With Trump maintaining a roughly 60% interest in DJT, the company’s market cap of around $6.2 billion gives him a stake worth approximately $3.7 billion.
As the election draws near, one thing is certain – the fate of DJT’s stock hangs precariously in the balance. Will it continue to oscillate wildly, or will it stabilize once the election outcome is determined? Only time will tell.
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