Shares of Trump Media & Technology Group (DJT) rose more than 10% in early trading on Tuesday, extending the double-digit percentage gain to start the week, as investors brace for more volatility as Election Day approaches the US is coming.
The stock suffered its biggest percentage drop last week, closing about 20% lower to end the five-day period on Friday, shaving about $4 billion off its market cap. Shares are still more than double from their September lows.
The recovery in stocks comes as investors await the results of the presidential election between Republican candidate Donald Trump and Democratic candidate Kamala Harris.
Volatility in the stock is expected to continue. One investor has warned that if Trump loses the election, 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 on a call with Yahoo Finance last week.
Before the recent volatility, shares in the company — home to the Republican candidate’s social media platform Truth Social — had risen steadily 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.
