Trump Media & Technology Group stock (DJT) climbed more than 10% in early trading on Tuesday, extending its double-digit percentage rise to kick off the week as investors brace for more volatility with Election Day underway in the US.
The stock suffered its largest percentage decline last week and closed down around 20% to end the five-day period on Friday, which shaved off around $4 billion from its market cap. Shares have still more than doubled from their September lows.
The stock’s recovery comes as investors await the results of the presidential election between Republican nominee Donald Trump and Democratic candidate Kamala Harris.
Volatility in the stock is expected to continue. One investor has warned that if Trump loses the election, shares of DJT could plunge to $0.
“It’s a binary bet on the election,” Matthew Tuttle, CEO of investment fund Tuttle Capital Management, recently told Yahoo Finance’s Catalysts.
Tuttle, who currently owns put options on the stock, said the trajectory of shares hinges on “a buy the rumor, sell the fact” trading strategy.
“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.
Prior to the recent volatility, shares in the company — the home of the Republican nominee’s social media platform Truth Social — had been on steadily rising in recent weeks as both domestic and overseas betting markets shifted in favor of a Trump victory.
Prediction sites like Polymarket, PredictIt, and Kalshi all showed Trump’s presidential chances ahead of those of Democratic nominee and current Vice President Kamala Harris. That lead, however, narrowed significantly over the weekend as new polling showed Harris surpassing Trump in Iowa, which has historically voted Republican.
And as betting markets tighten, national polls show both candidates in a virtually deadlocked race. Polls in key battleground states like Pennsylvania, Michigan, and Wisconsin, which are likely to decide the fate of the election, also show razor-thin margins.
In September, the stock traded at its lowest level since the company’s debut following the expiration of its highly publicized lockup period. Shares had also been under pressure as previous polling in September saw Harris with a bigger lead on the former president.
