Results of the 2024 election will begin coming in this evening, though it’s unlikely we’ll know whether Donald Trump or Kamala Harris won on Election Night. But shares of Donald Trump’s Truth Social parent company Trump Media (Nasdaq: DJT) yo-yoed Tuesday as investors awaited the results of the 2024 presidential election.
After the stock price briefly topped $40 and jumped 17% above Monday’s closing price, DJT stock tumbled back down to $33.94 a share, to finish the day at a 1.2% loss. As of 5:30 p.m. ET, shares were down up around 2% in after-hours trading.
It was the continuation of a roller coaster ride that Trump Media has been on for the past several days. Shares jumped 12% on Monday after three days of notable losses last week. Shares fell 22% last Wednesday, another 12% Thursday, and 14% more on Friday.
The volatility in Trump Media came as the overall stock market moved higher. The Dow was up 427 points Tuesday, closing more than 1% higher and the Nasdaq and S&P 500 both closed up more than 1%.
Here’s what you need to know about DJT’s stock performance as America stands by to learn who will lead it for the next four years.
What’s going on with DJT shares?
For the past several months, traders have been betting that a Trump victory in this election would result in steady growth for Trump Media. Shares fell last week as polling data showed a surge in Harris’s odds and revelations showed the rise in his odds on election betting sites were skewed by a single bettor in Paris.
Trump Media is what some call a “meme stock” or a “belief stock,” where the popularity of the personality behind the company is what makes the stock appealing to investors. Fervent followers of Trump could be pushing shares higher in their firm belief he will win.
On Tuesday, it’s possible some of those investors got cold feet. Trading of Trump Media was halted three times amid volatile trading. It’s also possible short sellers dumped some shares, which drove the price down.
How much is Trump’s stake in Trump Media now worth?
Trump owns 114.75 million shares of Trump Media and is, by far, its largest shareholder. At 1 p.m. ET today, the value of his holding stood at about $4.5 billion. By the end of the day, that had fallen to $3.9 billion.
That’s still far more than the $1.8 billion the holding was worth at the start of October, when the stock tumbled to $12.15 a share.
Are short sellers influencing the price of DJT stock?
That’s certainly possible. Short-selling interest remains remarkably high in the company. As of October 15, short interest in DJT stood at 13.2 million shares, a jump of almost 2 million shares from the end of September. Currently, more than 20% of Trump Media’s shares are held by short sellers, according to data from Fintel.
Has there been any change to Trump Media’s fundamentals?
No. The stock, from an earnings and revenue standpoint, is still massively overvalued. On Tuesday after the market closed, Trump Media reported a net loss in the third quarter of $19.2 million and with revenues of a little over $1 million.
Reports also emerged this week that Truth Social has hired two contract software programmers in Mexico through a third party. That appears to run counter to the company’s claims that it is “Proudly made in the United States of America.” Employees were said to complain about this to CEO Devin Nunes, saying it “contradicts the America First principles we stand for.” Trump has repeatedly threatened to place tariffs on Mexico, if elected.
What happens to DJT stock if Trump loses the election?
Predicting the direction of any company’s stock is something of a fool’s game—and there is no formal coverage of Trump Media by stock analysts. Many traders seem to believe that shares will drop sharply if Trump fails to take the White House. That’s what short sellers appear to be betting on.
How has the stock market historically reacted to presidential elections?
A CNBC study of post-election stock activity, dating back to 1980, suggests the major averages tend to fall the day after an election and for up to a week. Should the outcome be uncertain for an extended period of time, that could extend the volatility.
Update, November 5, 2024: This article has been updated with the latest stock market data and third quarter earnings results.