Trump's share in social media platforms is experiencing a remarkable resurgence as the election draws closer.
Until not too long ago, Trump Tech Media Group was in a state of chaos. Its stock value plummeted to an all-time low of $12.15 on September 23, representing an alarming 82% plummet from its high.
However, the proprietor of Truth Social is experiencing an extraordinary rebound, increasing its stock value more than double in under three weeks. It soared approximately 50% last week alone.
This is quite remarkable, even for a notoriously unpredictable stock that's often referred to as a stock on steroids for memes.
Trump Tech made no recent announcement of new revenue streams or revolutionary products. No Wall Street analysts or major stockholders endorsed it either.
Instead, this remarkable turnaround seems to be driven by the perceived likelihood of Trump winning in November. Trump Tech has always served as a platform for traders to speculate on elections.
The presidential race is still neck and neck, and the outcome could go either way. However, some betting markets and certain polls have slightly shifted in Trump's favor.
"It's quite straightforward," said Matthew Tuttle, CEO of Tuttle Capital Management. "People understand that if Trump wins, this stock could potentially soar. And if he loses, it's likely to plummet."
Trump is the company's public face. He's the most popular user on Truth Social, and his 114.75 million shares make him the primary shareholder.
The worth of Trump's stake in the company has skyrocketed by $1.6 billion since September 23, reaching around $3 billion.
Jay Ritter, a finance professor at the University of Florida with four decades of capital markets experience, described the 100% surge for Trump Tech since September 23 as "staggering."
"Memo stocks thrive on attention, and in the case of Trump Tech, the price also reflects the expectations of who will win the November election," Ritter said, pointing to betting markets like PredictIt that show Harris' lead over Trump has disappeared.
Michael Block, chief operating officer and co-founder at AgentSmyth, noted that there's a lot of bullish options activity expiring on November 15, just days after the election.
"This looks like a selective bet on a Trump victory on Election Day," said Block. "Trump's poll performance is improving, and his alliance with Elon Musk is changing the narrative."
Despite the recent surge, Trump Tech's stock value is still significantly lower than its March peak of $66. And the worth of Trump's stake is down by about $2.2 billion from its brief value in late March.
Beyond the election, Trump Tech's stock value has also benefited from the fact that Trump has retained his shares. Many investors assumed Trump could sell his shares once the restrictions preventing insiders from selling expired. However, so far, Trump has not disclosed any stock sales, and he has publicly stated that he is not selling.
"If Trump was maintaining a lead in the polls, but you believed he was going to sell, you wouldn't see the surge we've seen," said Tuttle. "The fact that he says he won't sell – and that he actually hasn't sold – sets the stage for this rally."
Ritter has consistently cautioned that the market is overvaluing Trump Tech excessively. He remains highly skeptical about Trump Tech, arguing that the company isn't worth more than the cash on its balance sheet due to lacking a proven business plan to generate profits.
"At today's stock price of about $25, the stock is overvalued by around 1,000% or so," Ritter said, "suggesting a 90% drop is inevitable eventually."
In light of the shifting polls and betting markets, potential investors are considering the potential impact of Trump's presidential victory on Trump Tech's stock value, making investing in the business a popular choice for some. Trump's continued ownership of his shares in the company, despite restrictions preventing insiders from selling, has also contributed to the stock's recent surge.
