Shares of Trump Media & Technology (DJT), the parent company of the Truth Social platform, experienced sharp swings on Tuesday, with trading halted multiple times due to market volatility.
Despite the ups and downs, the stock ended the day up 8.8%, following a 22% surge on Monday.
The trading frenzy saw DJT shares rise by 14% at the market’s open, before briefly falling into the red by 3%. After several fluctuations, shares managed to gain 9.3% by 12:45 p.m. ET.
The stock was halted five times within 32 minutes following the market’s opening as it saw rapid price shifts.
DJT eventually closed at $51.51, its highest level since May 30, when shares finished at $51.84. At one point during the session, the stock touched an intraday high of $54.68.
DJT’s stock has surged 220.5% in October, marking its strongest performance since October 2021, when the company recorded an astounding 580.9% rise.
Trump’s media company catches up with Musk’s X
With a market value of $9.5 billion as of Monday’s close, Trump Media’s valuation now places it on par with X, the social media platform formerly known as Twitter.
Investment group Fidelity, which holds a stake in X, has recently valued the platform at just under $10 billion, according to estimates from Forbes.
This valuation alignment is particularly noteworthy considering the companies’ financials.
While DJT reported a $16 million loss in the second quarter on under $1 million in revenue, X was generating over $1 billion in quarterly revenue before Elon Musk acquired it for $44 billion in October 2022.
Unpredictable DJT stock movement reflects volatility, political speculation
Market analysts note that DJT’s stock continues to behave independently of the company’s financial fundamentals.
The recent rally could be linked to speculation around the upcoming US presidential election on November 5, in which former President Trump is running.
Trump has emerged as the betting market favorite, with an average of 63% odds of winning the election, according to RealClearPolitics.
However, public opinion polls indicate a tighter race, with Trump polling at 48.5% against Vice President Kamala Harris at 48.4%.
Truth Social’s rise marks shift in investor behaviour
Since Trump Media went public through a merger with a special-purpose acquisition company (SPAC) in March, the stock has been known for unpredictable price swings.
Investors appear to be capitalizing on the volatility, with some suggesting that the stock’s movement reflects the market’s sentiment about Trump’s potential return to the White House.
A comparison of tech valuations: DJT versus X
While both DJT and X operate in the social media space, their business models and financial outcomes diverge significantly.
X, under Musk’s ownership, has undergone a restructuring to reshape its advertising model, while DJT relies on Truth Social as its main offering.
Despite the financial losses, DJT’s stock volatility demonstrates the speculative nature of the market.
Traders appear to be betting on future political developments and Truth Social’s potential as a platform aligned with Trump’s political brand.
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