Trump Media & Technology Group stock (DJT) surged as much as 25% before paring gains in after-hours trading on Tuesday as investors brace for more wild swings with Donald Trump edging ahead of Kamala Harris in the latest election results.
All states have now closed their respective polling stations. So far, Trump has secured 248 electoral college votes, while Harris has claimed 214, according to the Associated Press.
The stock had a wild session during market hours on Tuesday as trading was halted several times due to volatility, with shares quickly erasing 15% gains and reversing Monday’s double-digit percentage rise to kick off the week. Despite a recovery from steeper losses, shares still closed down a little over 1%.
The latest price action comes as investors await the results of the presidential election between the Republican nominee and his challenger.
Volatility in the stock is expected to continue as strategists categorize the stock as a binary bet on the election.
Matthew Tuttle, CEO of investment fund Tuttle Capital Management, recently told Yahoo Finance’s Catalysts that the trajectory of shares hinges on “a buy the rumor, sell the fact” trading strategy.
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“I would imagine that the day after him winning, you’d see this come down,” he surmised. “If he loses, I think it goes to zero.”
Interactive Brokers’ chief strategist Steve Sosnick said DJT has taken on a meme-stock “life of its own.”
“It was volatile on the way up, and when a stock is that volatile in one direction, it has a tendency to be that volatile in the other direction,” he said on a call with Yahoo Finance last week.
In September, shares in the company — the home of the Republican nominee’s social media platform, Truth Social — traded at its lowest level since the company’s debut following the expiration of its highly publicized lockup period.
Shares had bounced back from their lows, though, as both domestic and overseas betting markets shifted in favor of a Trump victory.
Trump founded Truth Social after he was kicked off major social media apps like Facebook (META) and Twitter, now X, following the Jan. 6, 2021, Capitol riots. Trump has since been reinstated on those platforms. He officially returned to posting on X in mid-August after about a year’s hiatus.
As Truth Social attempts to take on social media incumbents, the fundamentals of the company have long been in question.
On Tuesday, DJT dropped third quarter results after the market close that revealed a net loss of $19.25 million for the quarter ending Sept. 30. This was narrower than the $26.03 million the company reported in the year-ago period.
