Election Day Volatility Sends Trump Media & Technology Group Stock Soaring
As the US heads to the polls, Trump Media & Technology Group’s stock (DJT) is experiencing a wild ride. After suffering a massive 20% decline last week, the stock has rebounded, climbing over 10% in early trading on Tuesday.
A Binary Bet on the Election
The stock’s fate is closely tied to the outcome of the presidential election between Republican nominee Donald Trump and Democratic candidate Kamala Harris. According to Matthew Tuttle, CEO of Tuttle Capital Management, “It’s a binary bet on the election.” Tuttle, who owns put options on the stock, believes that if Trump loses, shares of DJT could plummet to $0.
Volatility Expected to Continue
Interactive Brokers’ chief strategist Steve Sosnick notes that DJT has taken on a life of its own, with a tendency to be highly volatile in both directions. This volatility is expected to continue as investors await the election results.
A Shift in Betting Markets
Prior to the recent volatility, shares in the company had been steadily rising as domestic and overseas betting markets shifted in favor of a Trump victory. However, over the weekend, new polling showed Harris surpassing Trump in Iowa, causing the lead to narrow significantly.
National Polls Show Deadlocked Race
National polls show both candidates in a virtually deadlocked race, with key battleground states like Pennsylvania, Michigan, and Wisconsin showing razor-thin margins.
Truth Social’s Questionable Fundamentals
Trump founded Truth Social after being kicked off major social media apps following the Jan. 6, 2021, Capitol riots. Despite his reinstatement on those platforms, the fundamentals of the company have long been in question. In August, DJT reported a net loss of $16.4 million, with revenue of just under $837,000 for the quarter ending June 30, a 30% year-over-year drop.
Trump’s Stake in DJT
Trump maintains a roughly 60% interest in DJT, giving him a stake worth around $4.7 billion at current levels of around $39 a share. The company’s market cap stands at about $7.8 billion.
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