Turbulence at Trump Media: Stocks in Free Fall

The shares of Trump Media & Technology Group (DJT) continued their steep decline on Thursday, following impressive gains earlier in the week. A drop of about 15 percent led to a temporary suspension of trading due to increased volatility. These impressive price fluctuations followed the largest percentage drop on Wednesday, when the shares sank by around 22 percent. Since Tuesday, the company's market capitalization has lost over 3 billion dollars. Yet, even after this decline, the stock value is still approximately 130 percent above its September lows. As the election date approaches, the fluctuations between gains and losses are expected to continue. An investor warned that the DJT stock could fall to zero if Trump loses the upcoming election. Matthew Tuttle, CEO of the investment fund Tuttle Capital Management, which currently holds put options on the stock, told Yahoo Finance that the stock movements could follow a "buy the rumor, sell the news" pattern. He speculates that the stock would drop even in the event of a Trump victory. Steve Sosnick, Chief Strategist at Interactive Brokers, emphasized in a discussion the unique volatility of DJT as a type of "meme stock." According to Sosnick, such stocks show significant volatility in both directions. The shares of Trump Media previously benefited from shifts in betting markets in favor of a Trump win, while national polls indicated a tight race between Trump and incumbent Vice President Kamala Harris. In key states like Pennsylvania, Michigan, and Wisconsin, the poll numbers are similarly neck-and-neck. Trump Media was founded after Trump was banned from major social media platforms following the Capitol riot in January 2021. However, he has since been allowed back on platforms like Facebook (META) and X, formerly Twitter. In August, he officially returned to X after about a year-long hiatus.