In many ways, Trump Media’s (NASDAQ: DJT) stock has become a reflection of how the American public – or, rather, the investing public – sees Donald Trump’s chances of being reelected in November 2024.
DJT shares experienced a massive rally after the Republican candidate survived the July assassination attempt – likely demonstrating the expectations of a red wave akin to when Reagan survived an attempt on his life.
Similarly, Trump Media stock experienced a protracted collapse after Vice President Kamala Harris joined the race due to her initial momentum severely reducing the former President’s chances.
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In September and October, the stock market movements well reflected both the market’s renewed confidence in Trump and the uncertainty in the final weeks before the elections.
The DJT stock back and forth
Specifically, DJT experienced a staggering rally during the October 16 session, rocketing 15.52% from the Tuesday close at $27.06 to the final price on Wednesday of $31.26.
In total, Trump Media stock is up 93.68% in the last 30 days and is 79.14% up year-to-date (YTD). The force behind the rally is perhaps best seen in the fact that DJT hit one of its 2024 lows less than a month ago on September 23 when it stood at $12.15 – significantly below the January 2 price of $17.45.
Still, it is worth remembering that no matter how high the expectations are that Trump will get reelected, uncertainty might be even higher.
Trump Media experienced unusually high volatility on Tuesday, October 15, triggering Nasdaq’s halt mechanisms and seeing the stock plummet 9.65% on the day.
Why is Trump Media stock making the wild swings
The abrupt and drastic ups and downs have mostly been attributed to shifting voter sentiment, with some speculating that Trump’s controversial Bloomberg interview at the Economic Club of Chicago triggered a sharp fall in confidence.
Still, it is worth remembering that, despite being something of a gauge of public perception, Trump Media is a publicly traded company first and foremost, and, thus, subject to market dynamics.
Indeed, the Tuesday plunge can be attributed to the sharp rise in the short ratio after an equal fall just one day earlier, Trump’s potential backing out of a promise and selling part of his stake – an eventuality that will be confirmed or disproved on October 17 either with an SEC filing or the lack thereof – or even to the simplest explanation of all: investors deciding to take profit after the massive 30-day rise.
Similarly, the Wednesday rally might not be a sudden renaissance of confidence in Trump’s victory, but traders ‘buying the dip’ en masse.
