The recent surge in stock price follows a significant drop to an all-time low of $12.15 on Sept. 23, with the stock now trading at $36.30 per share. Trump Media and Technology Group (TMTG) is the holding company that owns Truth Social, the social media platform founded by former President Donald Trump after being banned from mainstream sites following the events of Jan. 6, 2021. The stock is listed on Nasdaq under the symbol DJT, representing Donald John Trump’s initials.
Despite the recent rally, TMTG’s financial performance has been underwhelming, reporting losses of $344 million on revenues of $1.6 million in the first half of the year. However, the stock’s recent momentum may have attracted interest from momentum-based investors seeking to capitalize on its growth.
University of Florida finance professor Jay Ritter noted that the high trading volume relative to the public float indicates the presence of many short-term momentum traders, contributing to increased volatility in the stock’s price movements.
Various terms like sharks, piranhas, cheetahs, and bandwagon traders are used to describe different types of short-term momentum investors. October trading volumes for TMTG have been exceptionally high, with hundreds of millions of shares being exchanged in recent weeks.
The surge in TMTG’s stock price is closely linked to Trump’s political prospects, often trading independently of its business fundamentals. Recent election polls showing Trump gaining ground against Vice President Kamala Harris have influenced the stock’s performance.
TMTG has been compared to meme stocks, trading based on factors unrelated to business metrics but rather on political sentiment towards Trump. An SEC filing from June indicated that the majority of TMTG’s approximately 620,000 shareholders are retail investors, many of whom are fervent Trump supporters.
George Kailas, CEO of Prospero.ai, highlighted the influence of committed investors operating within echo chambers, which may not accurately reflect the company’s true financial health.