Trump Media Briefly Worth More Than X
Truth Social parent company Trump Media sees shares rally and then sink as stock price follows betting markets on Trump’s election chances
|
Getting your Trinity Audio player ready...
|
Shares in Trump Media dropped sharply on Wednesday, following two days of similarly steep gains, as the social media firm’s volatility increased in the last few days before the US presidential election.
On Monday the company’s stock closed 21.6 higher, followed by another 9 percent rise on Tuesday that valued the company at more than social media platform X, formerly Twitter.
Trading in Trump Media and Technology Group, or TMTG, was halted several times during Tuesday morning trading due to sharp stock movements.
Tuesday’s gains valued the company at more than $10 billion (£7.7bn), compared with around $9.4bn for X, based on the most recent value investment group Fidelity assigned to its stake in the company, which was acquired by Elon Musk in late 2022.
Volatility
But Wednesday saw those gains largely erased, with the stock dropping more than 20 percent.
Trump Media operates the relatively small social media platform Truth Social, created by former president Donald Trump after he was banned from Twitter, Facebook and other outlets in the aftermath of the 6 January, 2020 Capitol riots.
But the firm’s stock price fluctuations have tended to follow public sentiment around Trump’s re-election chances, rather than the company’s business fundamentals.
The shares dropped to an all-time low in September but have roughly quadrupled since then.
Market research firm S3 Partners said in a Tuesday report that the stock closely followed Trump’s odds in prediction and betting markets, which have recently shifted toward expecting a victory for Trump next week.
The firm said the stock could rise another 50 percent in the next few days or it could just as easily “become worthless if Trump were to lose”.
TMTG arrived on public markets in March via a merger with a shell company.
