CNN
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Shares of former President Donald Trump’s social media company roared higher on the final day before the US presidential election.
Trump Media & Technology Group (DJT), the parent company of Truth Social, surged 12% Monday. There was no apparent catalyst for the increase.
The stock has been highly volatile since it went public in March: It quadrupled in value over a five-week span before plunging by 41% over the past three trading sessions.
Traders have used Trump’s stock as a kind of barometer for the former president’s perceived reelection chances. If Trump is reelected, Truth Social could become an increasingly important communication tool, in the way that the former president used Twitter to disseminate policy and other information during his administration. If Vice President Kamala Harris wins, the business prospects for Truth Social are likely nonexistent.
The company’s shares do not trade on the fundamental health of the company’s business, which is minuscule by comparison with its better-known rivals such as X, TikTok and Instagram. The company is in a cash crunch and said it brought in less than $1 million in revenue in the past quarter.
Although polls show the presidential race remains extremely tight, online betting markets in recent weeks have given Trump the edge over Harris, and market analysts credit the Trump stock’s increase to the trend in prediction sites.
Similarly, when Harris began to make a comeback in online betting markets, Trump’s media stock began to implode. The precipitous decline shaved $2.4 billion off Trump’s net worth between Wednesday and Friday, cutting deeply into the $3.6 billion in gains Trump made during the previous month.
Monday’s gains added more than $400 million back to Trump’s net worth.
Trump’s election chances on betting sites rebounded somewhat Monday. But it’s not clear that Monday’s stock gains can be attributed to anything in particular, and the stock didn’t quite follow the incremental moves of bids on the betting market. The company made no announcements, and Trump didn’t appear to make any statements that would juice the stock.
The Trump stock is a “meme stock,” a speculative trade that can vary wildly for just about any reason.
The broader stock market Monday also bounced around a bit, although it was far less volatile than Trump’s media stock.
The Dow fell 258 points, or 0.6%. The S&P 500 fell 0.3%, and the Nasdaq also fell 0.3% after spending much of the day in positive territory.