DJT stock slumps 20% over last 5 days to cap volatile week ahead of Harris, Trump election

11/02/2024 00:55
DJT stock slumps 20% over last 5 days to cap volatile week ahead of Harris, Trump election

It was a volatile week for shares of Trump Media & Technology Group, the home of the Republican nominee's social media platform Truth Social.

Trump Media & Technology Group stock (DJT) extended its three-day slump, falling over 10% on Friday. The move capped off a volatile week that included multiple trading halts and massive swings in both directions just days ahead of the presidential election.

Over the five-day period, the stock has fallen about 20% despite a double-digit surge to kick off the week. Shares reversed course by Wednesday, suffering their largest percent decline after plunging around 22%.

Since Tuesday, more than $4 billion has been shaved from the company's market cap, although the stock still has more than doubled from its September lows.

The oscillating of shares between highs and lows will likely continue as the election nears. One investor has warned that if Trump loses the election next week, shares of DJT could plunge to $0.

"It's a binary bet on the election," Matthew Tuttle, CEO of investment fund Tuttle Capital Management, told Yahoo Finance's Catalysts show on Monday.

Tuttle, who currently owns put options on the stock, said the trajectory of shares hinges on "a buy the rumor, sell the fact" trading strategy.

"I would imagine that the day after him winning, you'd see this come down," he surmised. "If he loses, I think it goes to zero."

Interactive Brokers' chief strategist Steve Sosnick said DJT has taken on a meme-stock "life of its own."

"It was volatile on the way up and when a stock is that volatile in one direction, it has a tendency to be that volatile in the other direction," he said in a call with Yahoo Finance earlier this week.

Republican presidential nominee former President Donald Trump gestures after a Tucker Carlson Live Tour show at Desert Diamond Arena, Thursday, Oct. 31, 2024, in Glendale, Ariz. (AP Photo/Julia Demaree Nikhinson)

Republican presidential nominee former President Donald Trump gestures after a Tucker Carlson Live Tour show at Desert Diamond Arena, Thursday, Oct. 31, 2024, in Glendale, Ariz. (AP Photo/Julia Demaree Nikhinson) · ASSOCIATED PRESS

Prior to this week's sell-off, shares in the company, the home of the Republican nominee's social media platform Truth Social, had risen as both domestic and overseas betting markets shift in favor of a Trump victory. Prediction sites like Polymarket, PredictIt, and Kalshi all showing Trump's presidential chances ahead of those of Democratic nominee and current Vice President Kamala Harris.

The betting markets have tightened in recent days. And national polls show both candidates in a virtually deadlocked race. Polls in key battleground states like Pennsylvania, Michigan, and Wisconsin, which are likely to decide the fate of the election, also show razor-thin margins.

In September, the stock traded at its lowest level since the company's debut following the expiration of its highly publicized lockup period. Shares had also been under pressure as previous polling in September saw Harris with a bigger lead on the former president.

Democratic presidential nominee Vice President Kamala Harris speaks during a campaign rally at Bojangles Coliseum, in Charlotte, N.C., Thursday, Sept. 12, 2024. (AP Photo/Jacquelyn Martin)

Democratic presidential nominee Vice President Kamala Harris speaks during a campaign rally at Bojangles Coliseum, in Charlotte, N.C., Thursday, Sept. 12, 2024. (AP Photo/Jacquelyn Martin) · ASSOCIATED PRESS

Trump founded Truth Social after he was kicked off major social media apps like Facebook (META) and Twitter, now X, following the Jan. 6, 2021, Capitol riots. Trump has since been reinstated on those platforms. He officially returned to posting on X in mid-August after about a year's hiatus.

As Truth Social attempts to take on the social media incumbents, the fundamentals of the company have long been in question.

In August, DJT reported second quarter results that revealed a net loss of $16.4 million, about half of which was tied to expenses related to the company's SPAC deal. The company also reported revenue of just under $837,000 for the quarter ending June 30, a 30% year-over-year drop.

Earlier this month, the company revealed that its COO had stepped down in September.

Trump maintains a roughly 60% interest in DJT. At current levels of around $31 a share, Trump Media boasts a market cap of about $6.2 billion, giving the former president a stake worth around $3.7 billion.

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].

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