In an impressive display of volatility, shares of Trump Media (NASDAQ: DJT) rallied by 16% over the course of a week. Traders are wondering if this could be the beginning of a run that will see the DJT stock price rise over $20.
The stock’s performance is inseparable from media coverage of the former President. Significant events that have occurred over the course of his 2024 presidential campaign have always caused sudden changes in DJT prices — most notable with the 31.36% surge seen after the first attempt on the former President’s life on July 13 and the 11.79% increase seen after the second failed assassination attempt.
Positive factors influencing DJT stock
At press time, a multitude of factors — both positive and negative, are shaping investor sentiment on DJT.
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On the positive side, the rollout of a custom content delivery network (CDN), which is now operational in multiple sites across the country is the most concrete of these factors — but in this case, concrete does not necessarily translate to influential.
The debate performance of Trump’s running mate, JD Vance, was unexpectedly good in the eyes of conservative voters — after months of well-publicized PR and media misses.
As Trump’s poll numbers surge, so too does DJT stock — while the current 16% gain is impressive, the stock reached an even higher peak of $17.23 on October 1, amounting to a 19.42% increase.
Currently, the former President is ahead of his opposing candidate, incumbent Vice President Kamala Harris, per prediction markets. At press time, prediction markets give Trump a 50% chance of winning the election, marking a 0.4% increase, while Harris’ odds stand at 49% after a 0.1% drop.
Although some insiders did sell DJT stock after the lock-up period expired, the former President appears to have kept this word thus far and has not sold the stock — alleviating some concerns, though the stock did experience price depreciation of up to 18.07% as a result of insider selling.
The bearish case for Trump Media
While the stock has rallied significantly over the course of the week, long-term performance is another matter entirely. The stock is down 65.10% year-to-date (YTD), and two major factors pose risks that could see this week’s rally grind to a halt or even lead to a reversal.
An SEC filing dated September 28 reveals that the Chief Operating Officer (COO) of Trump Media, Andrew Northwall, has resigned. This was abrupt and not announced in advance.
Multiple Pulitzer-prize-winning nonprofit investigative journalism outfit ProPublica is also alleging that an anonymous internal “whistleblower” complaint that ended up with the company’s board of directors, detailing mismanagement by CEO Devin Nunes, has led him to effectively oust internal opposition, with the report naming both Northwall and Chief Product Officer (CPO) Sandro De Moraes as targets of retaliation.
As an addendum, De Moraes’ Truth Social bio now lists him as the ‘Former Chief Product Officer’ of the company.
Finally, pressures from insider selling are not abating — another recent SEC filing, dated September 26, reveals that co-founder Andy Litinsky’s company, United Atlantic Ventures, sold almost all its equity in DJT, amounting to 5% of total ownership, for a combined worth of more than $100 million. The transaction involved 7,525,000 shares; United Atlantic Ventures now holds just 100 shares.
Will DJT reach $20?
While these surges are certainly notable, it’s becoming increasingly apparent that fundamentals play little to no role in the valuation of DJT.
Should Trump’s poll numbers improve by Election Day, the stock might very well hit $20 — conversely, the opposite could drive the stock even lower, deepening its already impressive losses.
Ultimately, the outcome of the election will determine the long-term outlook of DJT.
Investors should note that while a Trump victory would no doubt propel the stock to new highs, a Harris victory would not spell certain and imminent doom for the stock.
The budding media conglomerate could very well position itself as a real presence in American political discourse — but in this case, the company’s valuation would have to withdraw to levels supported by actual fundamentals and metrics, not hopes and media coverage.
