Fears that shares of Trump Media (Nasdaq: DJT) could collapse, following the end of a lockup period have pretty much vanished. Just weeks after the parent company of Truth Social hit 52-week lows in late September, DJT stock is now on a bull run that could make other businesses jealous.
Shares of DJT were up again in midday trading Monday, climbing another 17% to more than $29.50. That’s far ahead of the recent low of $11.75 on Sept. 23. Since the beginning of October, shares have jumped more than 80%. And in the past 30 days, they’re up more than 71%.
What’s powering this surge in trader interest? Here’s what you need to know.
Why has investor sentiment in Trump Media stock turned so positive?
DJT investors are increasingly confident Donald Trump will retake the White House on November 5. While most polls show the race between Trump and Kamala Harris to be a virtual dead heat, Trump has been gaining ground in some voter assessments. An NBC poll saw Trump win back some of the support he lost after his rough debate performance. In September, Trump was seen as getting just 44% of the vote, but the company’s October poll raised that number to 48%.
The company did announce the release of the Truth+ streaming app for Android devices on October 10, but that was likely not a driver of the stock increase.
While the presidential race could still go either way, investors believe a Trump victory could give the stock (and Truth Social) a big boost, given Trump’s activity on the social media platform. (Trump has remained incredibly active on Truth, using it as his primary form of social media when making announcements or declarations. While his ban on Twitter was lifted by Elon Musk, Trump’s posts there have been few and far between.) Conversely, if he should lose, the stock could potentially fall further than its recent lows, though the former president’s loyal supporters, who hold many of the public shares, will likely keep it from collapsing.
How much is Trump’s stake in Trump Media now worth?
Trump owns 114.75 million shares of Trump Media’s DJT stock and is, by far, its largest shareholder. As of 1:00 p.m. ET, that put the value of his holding at $3.3 billion
That’s $1.5 billion more than two weeks ago, when his holdings were worth $1.8 billion.
Have any more insiders sold DJT stock?
Trump Media has not reported any significant sales of stock to the Securities and Exchange Commission (SEC) since United Atlantic Ventures, a partnership of former Apprentice contestants Andrew Litinsky and Wes Moss, unloaded 11 million shares in late September.
Are short sellers influencing the price of Trump Media’s DJT stock?
That remains difficult to determine, but short interest remains high in the company. As of September 30, short interest in DJT stood at 11.4 million shares, down just 3.1 million shares from mid-September. The next report showing short interest on Oct. 15 will be issued at the end of trading on October 24, which should show how much short-covering has helped the stock’s recent gains.
Has there been any change to Trump Media’s fundamentals?
There has not. The DJT stock, from an earnings and revenue standpoint, is still massively overvalued. Trump Media, in its most recent earnings in August, reported a net loss of $16.4 million and revenues of just $837,000. The company does have $344 million in cash on its balance sheet and no debt, it added.
What else is happening with the stock?
Prosecutors in New York, on Friday, asked a New York federal judge to sentence Michael Shvartsman and Gerald Shvartsman to prison for their involvement in an insider trading scheme involving the blank-check company that merged with Trump Media to take DJT public.
The brothers received nonpublic information about Trump Media being a potential target of a merger after signing nondisclosure agreements. They then purchased shares of Digital World Acquisition Corp. and sold them as soon as news of the planned merger was released.
Both men have pleaded guilty in the case. Prosecutors say Michael Shvartsman made more than $18 million in illegal profits, while Gerald Shvartsman earned $4.6 million. The brothers, who are from Ukraine, could also be deported once their sentences are completed.