Shares in Trump Media & Technology Group (DJT) plunged nearly 23% on Thursday, reversing the previous day’s gains after Donald Trump’s presidential election victory over Kamala Harris. The company, which operates Trump’s social media platform Truth Social, has experienced extreme volatility this week, with the stock’s movements closely linked to Trump’s political prospects.
DJT stock has dropped 21% over the last five days despite rallying 50% over the past month. Analysts have described it as a “binary bet” on the election. Matthew Tuttle, CEO of Tuttle Capital Management, noted that the stock’s performance is driven by a “buy the rumor, sell the fact” sentiment. “I would imagine that the day after him winning, you’d see this come down,” Tuttle predicted prior to the election.
The stock’s meme-like volatility has drawn comparisons to the likes of GameStop and AMC. Interactive Brokers’ chief strategist Steve Sosnick remarked that DJT had “taken on a meme-stock life of its own,” highlighting the stock’s tendency for rapid, unpredictable movements.
In September, DJT hit its lowest level since going public after the lockup period ended. The stock later rebounded as betting markets indicated a higher likelihood of a Trump victory.
Truth Social, which Trump launched after his ban from mainstream social platforms like Facebook and Twitter (now X), has faced scrutiny over its business fundamentals. Trump recently resumed posting on X in mid-August, potentially drawing attention away from his own platform.
Trump Media recently released its third-quarter results, reporting a net loss of $19.25 million, an improvement from the $26.03 million loss in the same quarter last year. Revenue stood at $1.01 million, a slight dip from the $1.07 million reported in Q3 2023, marking a 23% decline in revenue over the first nine months of this year compared to the previous year. The company’s COO also stepped down in September, adding to concerns about its leadership stability.
Despite these challenges, Trump’s stake remains substantial. His roughly 60% ownership in DJT, with shares trading around $31, values Trump’s holding at around $4 billion, based on the company’s market capitalization of $6.7 billion.
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