The Trump media seems ready for another day of extremely volatile trading.
Trump Media stock fell 12% in the first 90 minutes after markets opened on Wednesday. The day before that, trading on the stock was halted five times due to extreme volatility. The stock closed at $51.51 on Tuesday but fell to $45.57 on Wednesday morning.
Trump Media is on a decline with a 270% increase in the past month. While the stock's recent trajectory has certainly been up and to the right, intraday trading has been characterized by large fluctuations in the share price. On Tuesday, the stock fell 13% in the first hour of trading and rose 16% later in the day. In after-hours trading the stock was down 8% from its closing price of $51.
The wild fluctuations have been caused in large part by Trump Media & Technology Group's (TMTG) furious level of trading activity in the lead up to next week's presidential election.
TMTG stock (ticker symbol DJT) often trades more as a referendum on Trump's political handicaps than its actual business performance. Over the past few weeks, forecasters have pointed to a tight race that is effectively a stalemate, although it is in Trump's favor. Those predictions have supported the candidate as well as the stock as much as DJT has.
After hitting a low of $12.15 per share in late September, the stock saw a surge that coincided with Trump's lead in the polls. By mid-October, a series of polls showed Trump trailing Vice President Kamala Harris by a narrow margin. Around the same time, TMTG had its two highest volume trading weeks since going public. 195 million shares were traded the week of October 7. The number peaked the following week when 278 million shares were traded. On Tuesday morning, the stock had surpassed its 30-day trading average by 10:15 a.m. ET.
The large number of hands trading shares suggests that momentum traders are looking to ride TMTG for some quick and relatively easy profits. Momentum traders are investors who look for rising stocks and buy them until they reach their peak. Often, these types of investors want to make positive moves in the stock market rather than investing in the business for the long term.
Trump owns about 114.5 million shares of TMTG, which is 57% of the company. Despite getting legal permission after the lockup deadline was lifted in September, he has not sold any of his shares till now. Trump's stake in the company is valued at just over $5 billion as 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.