Trump Media Stock Rockets as Election Countdown Begins! Will It Hold?

As the 2024 presidential election approaches, the stock of Donald Trump’s social media company, Trump Media & Technology Group, is experiencing a dramatic resurgence on Wall Street, igniting interest and speculation among traders.

Following a substantial decline that saw its share price plunge to an all-time low of $12.15 on September 23—a staggering 82% drop from its previous high—the stock has flipped the script. In a remarkable twist, it has skyrocketed by approximately 120% over the past three weeks, more than doubling its value. Last week alone, the stock surged nearly 50%, with an additional 5% increase noted on Monday.

What sparked this meteoric rise? Surprisingly, there hasn't been any announcement of new revenue streams or major endorsements accompanying this comeback. Instead, the surge appears to be driven primarily by market sentiment regarding Trump's potential success in the upcoming election. Traders are treating Trump Media as a barometer of his electoral chances, with a plethora of betting markets reflecting an increasingly favorable outlook for Trump.

"It's straightforward—if Trump wins, this stock could soar," remarked Matthew Tuttle, CEO of Tuttle Capital Management. "If he loses, however, it may very well plummet to zero."

Trump’s influence on the company is undeniable: he is not just its face but also its most significant shareholder, with a staggering 114.75 million shares. His stake has seen a remarkable increase of around $1.7 billion since the stock’s nadir, bringing its total value to just over $3 billion.

Finance expert Jay Ritter from the University of Florida called the 100% price spike since late September "stunning," highlighting how meme stocks thrive on public attention and points to betting markets like PredictIt, which have recently shown a tightening race between Trump and current frontrunner Kamala Harris.

Michael Block, COO of AgentSmyth, observed that bullish trading options with expiration dates just after Election Day suggest that many are banking on a Trump victory. He noted that the former president's improved polling performance, alongside a shift in narrative through his alliance with influential figures like Elon Musk, may be reinforcing confidence among investors.

Despite the impressive recovery, Trump Media’s stock remains far from its previous zenith. The stock hit a peak of $66 back in March and is currently still down approximately $2 billion from that peak value.

Interestingly, the stock's recent buoyancy may also be attributed to Trump’s decision to retain his shares. Speculation had swirled about whether he might sell his holdings following the expiration of lock-up restrictions, but he has yet to make any sales, reassuring investors of his commitment to the company.

Tuttle emphasized the significance of this factor, stating, "If investors believed Trump would sell, the stock wouldn’t have surged like it has. His commitment is crucial for this rally."

Nevertheless, some market analysts continue to express caution regarding Trump Media's valuation. Ritter, who has long held a skeptical view, argues that the market may be significantly overrating the company, estimating it is overvalued by about 1000%. He warns that a correction could see the stock losing up to 90% of its current value.

As the presidential race heats up, all eyes will remain glued to both the political developments and stock fluctuations. Can Trump Media sustain its upward momentum, or will it be another chapter in the rollercoaster ride of meme stocks? Keep watching!