Why is Donald Trump’s media company (DJT) stock surging in recent weeks?
Although the basic fundamentals of Trump Media, parent company of Truth Social, haven’t changed, its faltering stock price has seen a reversal of fortune.
Donald Trump’s media company has seen a reversal of fortune in the stock market in recent weeks surging over 150% from an all-time low of $12.15 on September 23. This isn’t the first time though that the share value of Truth Social’s parent company has seen large swings.
A few weeks after hitting its all-time high in March at over $66, the company’s stock lost nearly two thirds of its value, then rebounded to almost twice that value. The volatility of Trump Media’s stock price has most experts calling it a meme stock, like GameStop and AMC, but on “steroids,” as one analyst put it. So, what is behind the most recent boost to Trump Media’s valuation.
Why is Donald Trump’s media company (DJT) stock surging in recent weeks?
The market value of Trump Media stock (DJT) has been closely tied with the political fortunes of its biggest shareholder, former President Trump, who controls 57% of the company’s shares. After Vice President Kamala Harris replaced President Joe Biden at the top of the Democratic ticket and her candidacy created newfound excitement among voters the media company’s shares began a steady slide.
Then as the expiration date on lock-up restrictions, which prevented insiders from selling their shares, approached, the stock value plunged to new lows. There were fears that the former President might cash in his shares to get a windfall. However, as far as it is known, he followed through on his vow not to sell.
That, along with betting odds edging higher that the Republican candidate will win the November 5 presidential election and Harris announcing that she will do an interview on Fox News have all helped to push the stock price up, even though the basic fundamentals of Trump’s media company haven’t changed.
Jay Ritter, a finance professor at the University of Florida’s Warrington College of Business, told CNN that the company is being dramatically overvalued by the market. “The stock is pretty much divorced from fundamentals,” he told the outlet earlier this year. He places the real value of Trump Media at $2, or less, a share.
This week he told CNN that “the stock is overvalued by 1,000% or so,” which suggests “a 90% drop will eventually occur,” he predicts.