Shares of Trump Media & Technology Group (DJT) opened about 2% higher on Monday as shares prepare for another volatile week on Wall Street just one day before the presidential election.
The stock had its biggest percentage decline last week, closing down about 20% on Friday to end the five-day period.
And since Tuesday, more than $4 billion has been wiped from the company’s market cap, though the stock is still more than doubled from its September low.
Stock swings are likely to continue as the election approaches. One investor has warned that if Trump loses the election on Tuesday, DJT shares could fall to $0.
“It’s a binary bet on the election,” Matthew Tuttle, CEO of investment fund Tuttle Capital Management, recently told Yahoo Finance’s Catalysts.
Tuttle, who currently owns put options on the stock, said the stock’s trajectory depends on the “buy the rumor, sell the fact” trading strategy.
“I imagine you would see this happen the day after he won,” he surmised. “If he loses, I think it goes to zero.”
Steve Sosnick, chief strategist at Interactive Brokers, said DJT has taken on a “life of its own.”
“It’s been volatile on the way up and when a stock is so volatile in one direction, it tends to be so volatile in the other direction,” he said in a call with Yahoo Finance earlier this week.
Before the recent sell-off, shares in the company, home to the Republican candidate’s social media platform Truth Social, had risen in recent weeks as both domestic and foreign betting markets shifted in favor of a Trump victory.
Prediction sites such as Polymarket, PredictIt and Kalshi all showed that Trump’s presidential chances are higher than those of Democratic candidate and current Vice President Kamala Harris. That lead narrowed significantly this weekend, however, when new polls showed Harris overtaking Trump in Iowa, which has historically voted Republican.
And as betting markets tighten, national polls show both candidates in a virtually deadlocked race. Opinion polls in key states like Pennsylvania, Michigan and Wisconsin, which will likely determine 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 the much-discussed lock-up period. Stocks were also under pressure as previous polls in September showed Harris with a wider lead over the former president.
Trump founded Truth Social after being kicked off major social media apps like Facebook (META) and Twitter, now X, following the Capitol riots of January 6, 2021. Trump has since been reinstated on those platforms. He officially returned to his post at X in mid-August, after a hiatus of about a year.
