TLDR:
- DJT stock closed 12% higher on Monday despite earlier losses and a 20% decline last week
- Trump owns approximately 60% stake in DJT, worth around $4.1 billion at current share prices
- Stock volatility is closely tied to election betting odds between Trump and Harris
- Some investors warn stock could plunge to $0 if Trump loses the election
- Company reported Q2 net loss of $16.4M with revenue of $837,000, down 30% year-over-year
The Trump Media & Technology Group stock (DJT) demonstrated significant volatility on Monday, November 4, closing 12% higher at $34.34 despite earlier losses in the trading session.
This movement comes just one day before the highly anticipated presidential election between former President Donald Trump and Democratic nominee Kamala Harris.
The company’s stock experienced its largest percentage decline last week, dropping approximately 20% over the five-day period ending Friday. Since Tuesday, more than $3 billion has been erased from the company’s market capitalization, though the stock maintains levels more than double its September lows.
Market experts have noted the stock’s behavior mirrors typical meme-stock characteristics. Interactive Brokers’ chief strategist Steve Sosnick observed that DJT has taken on a “life of its own,” pointing out that stocks showing high volatility in one direction often exhibit similar movements in the opposite direction.
Trump maintains a roughly 60% ownership stake in the company, which at current share prices of around $34 translates to approximately $4.1 billion. The company’s total market capitalization stands at about $6.9 billion.
The stock’s performance has shown a strong correlation with Trump’s polling numbers and betting odds. Recent weeks saw share prices rise as overseas betting markets shifted in favor of a Trump victory. However, this momentum has wavered as weekend polling showed Harris gaining ground in traditionally Republican strongholds like Iowa.
Matthew Tuttle, CEO of Tuttle Capital Management, who currently holds put options on the stock, characterized DJT as “a binary bet on the election.” He suggested that even if Trump wins, the stock might face downward pressure due to a “buy the rumor, sell the fact” trading pattern.
The company’s financial fundamentals have raised concerns among market observers. In its second quarter results, DJT reported a net loss of $16.4 million, with about half attributed to expenses related to its SPAC deal. Revenue for the quarter ending June 30 was just under $837,000, representing a 30% decrease from the previous year.
Recent corporate developments have added to the uncertainty surrounding the company. Last month, DJT disclosed that its COO had stepped down in September, adding another layer of complexity to its operational outlook.
Truth Social, the company’s main product, was founded after Trump’s removal from major social media platforms following the January 6, 2021, Capitol riots. While Trump has since been reinstated on these platforms and returned to posting on X (formerly Twitter) in mid-August, Truth Social continues to face challenges in competing with established social media companies.
National polls currently show both presidential candidates in an extremely close race, with battleground states like Pennsylvania, Michigan, and Wisconsin showing particularly tight margins. These electoral dynamics continue to influence DJT’s stock performance.
The stock’s journey since its market debut has been marked by notable volatility. September saw the shares trade at their lowest levels following the expiration of a highly publicized lockup period, coinciding with polling that showed Harris leading the former president.
Betting markets have recently tightened, reflecting the uncertainty of the election outcome. Prediction sites such as Polymarket, PredictIt, and Kalshi have shown fluctuating odds between the candidates.
The stock’s performance on Monday suggests that investors remain highly reactive to any news or developments related to the election. Trading volume has remained elevated as market participants position themselves ahead of the election results.
The company’s ability to compete in the social media space remains under scrutiny, particularly given its recent financial performance and leadership changes. These factors continue to influence investor sentiment alongside the broader political context.
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