Shares of Trump Media & Technology Group (DJT), a stock heavily influenced by the former president's political fortunes, rose by approximately 2% on Monday, signaling market anticipation of a tight presidential election race. With less than 24 hours until the polls close, DJT stock has emerged as a financial barometer for the election outcome, fluctuating with each shift in polling and prediction markets.
The stock had a rocky prior week, dropping around 20% as Vice President Kamala Harris gained momentum in key battleground states. DJT's volatile movements underscore investor sentiment tied to the election, with analysts warning of significant consequences should Trump lose. "It's a binary bet on the election," said Matthew Tuttle, CEO of Tuttle Capital Management, adding that the stock could "plunge to zero" in the event of a Harris victory.
DJT, which operates Trump's social media platform Truth Social, has attracted attention as a politically charged "meme stock," with unpredictable swings reflecting both retail and institutional trading bets on Trump's potential return to the White House. "This stock has taken on a meme-stock life of its own," noted Steve Sosnick, chief strategist at Interactive Brokers, emphasizing its tendency for extreme volatility.
Polling data has been central to DJT's performance. National polls indicate an exceptionally close race, with Trump and Harris each commanding about 49% of voter support, according to a new NBC News poll released Sunday. However, the margin varies in pivotal swing states, with Harris leading among early voters in critical areas, while Trump holds the edge among those planning to vote in person.
Prediction markets have also heightened the stakes for DJT shareholders. The Kalshi market, which previously tipped the odds in Trump's favor, briefly shifted to favor Harris before swinging back to give Trump a narrow lead of 54.5%. Similarly, PredictIt now shows Harris with a slight advantage, while Polymarket reflects a narrowing lead for Trump, currently showing a 55% chance of victory, down from 67% last week. Election Betting Odds, an aggregator of prediction markets, still leans toward Trump, with a 55% chance of winning.
Trump Media shares saw a marked rise in recent months as prediction markets and betting platforms favored a Trump comeback. The stock experienced a notable surge, doubling from September lows before last week's sharp decline. Analysts attribute the recent sell-off to narrowing polls and heightened uncertainty as the election draws near.
Trump's social media venture, Truth Social, has been integral to his post-presidential brand, launched after he was banned from major platforms such as Twitter and Facebook following the January 6 Capitol events. Truth Social aimed to capture users supportive of Trump's message, though the company's financials reveal ongoing challenges. In its most recent earnings report, DJT posted a second-quarter net loss of $16.4 million, with revenue dropping 30% year-over-year to just under $837,000.
Concerns over the company's operational stability and profitability have also weighed on its stock. In addition to reporting substantial losses, the company announced the resignation of its chief operating officer last month, creating further investor apprehension. Trump remains a major stakeholder, holding roughly 60% of DJT, with his share valued at around $3.7 billion based on the company's current market cap of approximately $6.2 billion.
Election day promises to be pivotal for DJT investors. A report from S3 Partners recently suggested that a Trump victory could lead to a short squeeze, potentially spiking the stock's value. However, the same analysis indicates that DJT stock "could become worthless" if Trump loses.
The potential impact of a Trump loss was starkly framed by Tuttle, who said that DJT's current value could be wiped out if Trump fails to secure the presidency. According to Tuttle, a "buy the rumor, sell the fact" strategy appears to be in play, with a Trump win possibly triggering initial enthusiasm but leading to a sell-off as investors cash in.
Market volatility is expected to persist post-election, particularly as polling agencies and prediction markets remain divided. A razor-thin victory margin in key states such as Pennsylvania, Michigan, and Wisconsin could delay the results, prolonging uncertainty and intensifying DJT's price swings.
