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    • DJT shares are rising ahead of the election. This is why.
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    DJT shares are rising ahead of the election. This is why.

    Vaseline Posted on

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    Since shares of Trump Media & Technology Group fell to a record low last month, they have been booming.

    Shares of former President Donald Trump’s social media company rose more than 20% to $47.36 on Monday, the highest level since June.

    Trump Media’s comeback has given Trump, who owns nearly 57% of the company, billions in paper wealth. His stake is now worth more than $5 billion.

    The rally in stocks in the final days before the election is a clear sign of one thing: Investors are betting that Trump will retake the White House.

    Polls show the race is deadlocked, but “the perception is that he is winning now,” Matthew Tuttle, CEO of Tuttle Capital Management, told USA TODAY earlier this month.

    The other driving force? The stock is full of short-term speculators.

    Monday’s stock surge came not as Trump’s chances of winning the election increased substantially, but after Trump’s six-hour rally at Madison Square Garden in New York City, which drew thousands of his supporters wearing red MAGA hats.

    “DJT remains exceptionally volatile on a daily basis as there are speculators using short-term momentum strategies. They buy when the price goes up, which pushes the price up even more,” said University of Florida finance professor Jay Ritter.

    Meme stocks like Trump Media thrive on attention, Ritter said.

    “Today’s rally was driven by this attention and then multiplied by momentum traders,” he said. “However, the higher the price goes, the greater the downside potential. This stock is incredibly risky.”

    Trump Media does not act on business fundamentals. It’s a small player in the social media world, losing money and making virtually no revenue.

    In August, it reported a net loss of $16.4 million on revenue of just under $837,000. The company has also been dogged by lawsuits and reports of management unrest.

    The main draw is Trump. Trump Media would become more valuable if the next president is the majority owner, as its flagship product, Truth Social, is the Republican presidential candidate’s megaphone of choice.

    On the other hand, a loss for Vice President Kamala Harris could hurt stocks.

    In regulatory filings, Trump Media, which trades under the vanity sticker DJT, has telegraphed how critical Trump is of the company’s brand, warning that its value “could decline” as Trump’s popularity falters.

    “If he wins, they can do something with this company,” Tuttle said of Trump. “If he loses, I don’t see any way it stays afloat.”

    Vaseline
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