Trump Media and Technology Group (DJT) stock rose more than 10% in early trading on Tuesday, extending its double-digit rise at the start of the week as investors brace for more volatility as Election Day begins in the United States.
The stock suffered its biggest percentage decline last week and closed down nearly 20% to end the five-day period on Friday, knocking about $4 billion off its market value. Still, shares have more than doubled from their September lows.
The stock’s recovery comes at a time when investors are awaiting the results of the presidential elections between Republican candidate Donald Trump and Democratic candidate Kamala Harris.
Volatility in stocks is expected to continue. One investor 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 Motivators.
Tuttle, who currently holds put options on the stock, said the stock’s trajectory hinges on the “buy the rumour, sell the truth” trading strategy.
“I imagine the day after he wins, you’ll see a decline in that,” he said. “If he loses, I think the score will go to zero.”
DJT has taken on “a life of its own,” said Steve Sosnick, chief strategist at Interactive Brokers.
“The stock has been choppy on the way up, and when a stock is choppy one way, it tends to be choppy the other way,” he said on a call with Yahoo Finance last week.
Before the recent volatility, shares of the company — home to Republican candidate Truth Social’s social media platform — had been steadily rising in recent weeks as domestic and offshore betting markets shifted in favor of a Trump win.
Prediction sites like Polymarket, Expect itand everything All of them showed Trump’s presidential chances ahead of Democratic nominee and current Vice President Kamala Harris. However, that lead narrowed significantly over the weekend as new polls showed Harris in the clear Beating Trump in Iowa Which historically voted Republican.
As betting markets tighten, National opinion polls Both candidates appear in a nearly deadlocked race. Opinion polls in key battleground states such as Pennsylvania, Michigan and Wisconsin, which are likely to decide the fate of the elections, show very slim margins.
In September, the stock traded at its lowest level since the company’s debut following the end of a highly publicized lockdown period. Stocks were also under pressure as previous polls in September showed Harris with a larger lead over the former president.
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