Shares of Trump Media & Technology Group (DJT) were halted on Tuesday due to volatility in late afternoon trading, as investors brace for more wild swings as Election Day gets underway in the US.
Shares quickly erased a 15% gain, reversing Monday’s double-digit percentage gain to start the week.
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 latest price action 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.
Read more: Trump vs. Harris: 4 Ways the Next President Could Impact Your Bank Accounts
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 that volatile in one direction, it tends to be that 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 been rising 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 Harris had a wider lead over the former president in previous polls in September.
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.
While Truth Social looks to take on social media incumbents, the company’s fundamentals have long been in question.
In August, DJT reported second-quarter results showing a net loss of $16.4 million, about half of which was related to expenses related to the company’s SPAC deal. The company also reported revenue of just under $837,000 for the quarter ended June 30, down 30% year over year.
Last month, the company announced that its COO had resigned in September.
Trump has about a 60% stake in DJT. At current levels of about $34 per share, Trump Media has a market cap of about $6.9 billion, giving the former president a stake of about $4.1 billion.
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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