Shares of Trump Media & Technology Group (DJT) continued their upward momentum on Monday, closing up more than 21% following Donald Trump’s contentious rally at Madison Square Garden over the weekend. Investors are increasingly optimistic about the former president’s chances in the upcoming November election, propelling the stock to its highest level since early June, representing a remarkable 240% increase from its September lows.
Other stocks associated with Trump also followed suit. Phunware (PHUN), a mobile advertising software firm linked to the former president, initially rose before ending the day flat. Meanwhile, conservative video platform Rumble (RUM) experienced a nearly 15% increase.
The rally, however, was marred by controversy, particularly due to comedian Tony Hinchcliffe’s inflammatory remarks regarding Latino and Black communities, alongside anti-immigration sentiments that sparked backlash from both sides of the political spectrum.
Despite the stock’s impressive performance, analysts caution that this surge may not be sustainable. Matthew Tuttle, CEO of Tuttle Capital Management, characterized the investment in DJT as a “binary bet” on the election’s outcome. He warned that if Trump loses, the stock could plummet to zero, given its volatility.
“It’s a buy the rumor, sell the fact” situation, Tuttle explained, suggesting that a post-election win for Trump could lead to a significant drop in stock prices. He currently holds put options on DJT, indicating his bearish outlook.
The stock’s recent rally aligns with betting markets, which show increasing odds in favor of a Trump victory over Democratic nominee and current Vice President Kamala Harris. Prediction platforms like Polymarket and PredictIt reflect this shift, although national polls indicate a very tight race, particularly in crucial battleground states like Pennsylvania and Michigan.
This rebound comes after DJT’s shares had hit a low following the expiration of a high-profile lockup period last month, compounded by polling earlier in September showing Harris slightly ahead of Trump.
Trump’s campaign has gained traction recently, marked by appearances in key locations, including a McDonald’s in Pennsylvania, where he had previously survived an assassination attempt. Elon Musk, the tech mogul and CEO of Tesla and SpaceX, attended Trump’s rally and has expressed his support for the former president, hinting at a potential Cabinet position, although Musk’s commitments make it unlikely.
As for Harris, she has ramped up her media presence, responding to questions about funding her proposals related to the economy and immigration. Her latest rally was held in Houston, Texas, on Friday.
Trump launched Truth Social after being banned from major social media platforms like Facebook and Twitter following the January 6 Capitol riots, and he returned to X (formerly Twitter) in mid-August. However, the fundamentals of his media venture remain under scrutiny.
In August, DJT reported a second-quarter net loss of $16.4 million, with approximately half attributed to expenses from its SPAC deal. The company’s revenue for the quarter was just under $837,000, marking a 30% year-over-year decline. The recent resignation of the COO also raised concerns about the company’s stability.
With Trump retaining around 60% ownership of DJT, the company currently has a market cap of about $9.5 billion, valuing Trump’s stake at approximately $5.7 billion, based on the stock’s current price of over $47 per share.
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