Why Is Trump's Social Media Stock Skyrocketing Again?
On Monday, Trump Media & Technology Group (DJT)'s stock price soared nearly 20%, with a monthly increase exceeding 70%. The stock's surge also reflects the possibility of Trump regaining the White House.
In fact, on September 23, DJT's stock price plummeted to a historical low of $12.15, an 82% drop from its peak. However, in the three weeks following, the stock price more than doubled. It rose nearly 50% just last week, and on Monday, it increased by 20% again, with a gain close to 150% since September 23. On Tuesday's pre-market, as of press time, DJT once again delivered a nearly 7% increase.
This dramatic shift is driven by the possibility of Trump winning in November, and for a long time, this stock has been a way for traders to bet on the election.
Currently, the race for the White House remains evenly matched, with both Harris and Trump having the potential to win. However, betting markets and some recent polls have shifted somewhat in Trump's favor.
Matthew Tuttle, CEO of Tuttle Capital Management, pointed out: It's really simple. People realize that if Trump gets elected, this stock has the potential to do something. And if he doesn't get elected, it probably goes to zero.
The core asset of DJT is Trump's own social media company, Truth Social, where Trump is not only a major shareholder but also a spokesperson.
Jay Ritter, a finance professor at the University of Florida who has been studying capital markets for 40 years, commented that the fact DJT's stock price has surged by 100% since September 23 is truly "stunning.
Ritter added that the company's stock price surge reflects the increasing odds of Trump winning the election. On the betting site PredictIt, Harris's advantage over Trump has disappeared.
Michael Block, Chief Operating Officer and co-founder of AgentSmyth pointed out that on November 15th, just a few days after the election, many call options will expire.
Despite the recent stock price surge, DJT's stock price still has a long way to go to reach its peak of $66 in March. The value of Trump's holdings has decreased by about $2 billion compared to the end of March.
In addition to the election, the company's stock price also benefits from the former president's continued holding of his own stocks. Many investors speculate that Trump may sell his stocks after the lock-up period. However, so far, Trump has not disclosed any stock sale plans, and he has publicly stated that he will not sell DJT's stock.
However, Ritter warned that the market has severely overestimated the value of DJT. He remains deeply skeptical of the company, believing that DJT's value is merely the cash on the balance sheet because it has not proven to have a business plan that can generate profits.