Election Day Buzz Sends Trump Media Stocks Soaring
As the United States went to the polls on Election Day, investors were placing their bets on the future of Trump Media & Technology, the company behind Truth Social. Shares of the company, which trades under the ticker DJT, surged on Tuesday, with traders hoping a second Trump presidency would give the business a significant boost.
A Proxy for Republican Hopes
Wall Street research firms had flagged Trump Media as a stock to watch in the lead-up to the election, seeing it as a proxy for the Republican candidate’s chances of retaking the White House. The stock’s performance has been closely tied to Trump’s political fortunes, making it a bellwether for his supporters.
Volatility Reigns
Despite nearly doubling year-to-date, Trump Media’s stock has struggled in recent weeks, plummeting 33% over the past week as Vice President Kamala Harris gained momentum. However, it bounced back on Monday, rising 12%, and continued its upward trajectory on Tuesday, gaining around 6% in premarket trading.
Retail Traders Take the Reins
The stock’s wild swings have been fueled by huge retail trader inflows in the week leading up to the election. Trump Media has become the most-discussed stock on Reddit’s WallStreetBets page, a hub for individual investors who drove the GameStop meme stock frenzy in 2021.
Metrics Don’t Add Up
While some traders are making money from the stock’s volatility, analysts warn that the metrics don’t support its long-term viability. “We are trading this like Gamestop on steroids right now,” said Jay Woods, chief capital strategist at Freedom Capital Markets. “But over the long term, the metrics don’t make any sense.”
* Neck and Neck in the Polls*
Despite the stock’s dramatic moves, the latest NBC News poll shows Trump and Harris are neck and neck, with both candidates garnering support from 49% of voters. As the election results come in, investors will be watching closely to see how Trump Media’s stock reacts to the outcome.
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