Trump’s social media stock spikes as America goes to the polls
New York
CNN
—
Former President Donald Trump's social media company is surging on Election Day as it faces a potential make-or-break moment that will be decided by voters.
Shares of Truth Social owner Trump Media & Technology Group spiked 13% on Tuesday morning.
The rally builds on a gain of 12% Monday and represents a rebound from three days of steep losses last week.
Traders have been betting for months that a Trump victory could enhance the value of Truth Social, though justifying its current price tag would be very difficult even if Trump is back in the White House.
Trump Media is losing money and generates very little revenue. Its main product, conservative social network Truth Social, remains tiny. Yet Trump Media has morphed into a multi-billion-dollar meme stock and a favorite way for traders to bet on how this election cliffhanger will end, inflating the net worth of its biggest shareholder along the way.
Some other elements of the so-called Trump Trade increased on Tuesday as well. Big bank stocks and bitcoin rallied. So did private prison companies Geo Group and CoreCivic. Prediction markets have shifted in Trump's direction, too.
Still, the final polls and prominent election models suggest the race for the White House is a true coin flip that could go either way.
Matthew Tuttle, CEO of Tuttle Capital Management, told CNN on Tuesday that it's far too early to draw any conclusions from the Trump Media spike and other market moves.
"It's extremely early. I don't think we're seeing smart money here. We're seeing people throwing darts at a board," Tuttle said.
Trump Media, which trades under the stock ticker symbol "DJT," has plenty at stake.
Even though Trump Media generated just $1.6 million in revenue this year, it's valued at nearly $8 billion based on Tuesday's gains. That means Trump Media's market value is about equal to Paramount Global, a media conglomerate that owns CBS and has brought in more than $14 billion this year.
If Trump loses the election, Trump Media has little to fall back on. Venture capitalist Gene Munster recently told CNN that a Trump loss could cause Trump Media's value to crash to just $1 billion. Others think it could be worth even less.
"I wouldn't touch DJT because I think the downside is zero, and I'm not sure how much upside there is," Tuttle said.
Trump owns 114.75 million shares in the company, making him the dominant shareholder. At current prices, those shares are worth about $4.5 billion. That's up sharply from $1.4 billion on Sept. 23 when Trump Media closed at a record low.
