Trump media looks set for another day of extremely volatile trading.
On Wednesday, Trump Media shares fell 12% in the first 90 minutes after the market opened. Trading in the stock took place the day before stopped five times due to excessive volatility. The stock closed at $51.51 on Tuesday but fell to $45.57 on Wednesday morning.
Trump Media has been on a tear over the last month, rising 270%. While the stock’s recent performance has clearly been up and to the right, intraday trading has been characterized by large swings in the stock price. On Tuesday, the stock fell 13% in the first hour of trading before rising another 16% later in the day. In after-hours trading, the stock fell another 8% from its closing price of $51.
The wild swings were due in large part to Trump Media and Technology Group’s (TMTG) heavy trading activity ahead of next week’s presidential election.
TMTG stock (ticker symbol DJT) is often traded rather than Referendum on Trump’s political chances than on the actual business development. In recent weeks, forecasters have pointed to a tight race that is effectively deadlocked, although it is tipping in Trump’s favor. These predictions have favored DJT stock as much as the candidate.
After bottoming at $12.15 in late September, the stock experienced a surge that coincided with Trump’s surge in the polls. In mid-October, a series of polls showed Trump narrowly trailing Vice President Kamala Harris. Around this time, TMTG had its two trading weeks with the highest volume since it went public. During the week of October 7th, 195 million shares were traded. That number was surpassed the following week when 278 million shares were traded. As of Tuesday morning, the stock had surpassed its 30-day trading average as of 10:15 a.m. ET.
The large number of stocks traded suggests that momentum traders may be looking to make quick and relatively easy profits using TMTG. Momentum traders are investors who look for rising stocks and buy them until they peak. In most cases, this type of investor tries to profit from a positive development on the stock market instead of investing in the company for the long term.
Trump owns about 114.5 million shares of TMTG, accounting for 57% of the company. So far he has not sold any of his shares, even though he is legally allowed to do so Blocking period lifted in September. Trump’s stake in the company was worth just over $5 billion at the time of this article’s publication and now accounts for the majority of his net worth.
TMTG did not immediately respond to a request for comment.