Trump Media stock sinks 15% as post-election excitement quickly fades
Shares of Trump Media and Technology Group sank 15% at market open Thursday, paring back some of the company’s election-fueled gains.
Trump Media stock opened at $30.48 per share. While shares had surged almost 40% in pre-market trading Wednesday in the aftermath of Donald Trump’s election victory, the company — which owns the president-elect’s Donald Trump’s social media platform Truth Social — saw the gains fade quickly.
Its stock closed up more than 5% Wednesday and ended the trading day with a per share value of $35.96.
In the weeks leading up to Election Day, DJT stock saw all kinds of volatility: It sunk by double digits last week as polls showed Democratic nominee Kamala Harris gaining ground in a number of battleground states, and then pared back those losses early this week in a renewed bout of “pre-election euphoria.”
The stock had become something of a proxy for Trump’s election odds, and a way for fans and followers to buy into the Republican candidate, making it what Morningstar’s (MORN) vice president of research John Rekenthaler calls an “affinity stock.”
“This is the most emotional stock on the stock exchange,” he told Quartz ahead of the election.
In the six weeks leading up to the election, the stock surged more than 100%. That cost short sellers, investors who bet against a certain stock, some $420 million, according to a report released Wednesday by S3 Partners and reported by Reuters.
On Wednesday alone, once the election was called for Trump, short sellers lost 14 million shares valued at $5.50 per share — or $77 million, according to S3's analysis.
While Rekenthaler warned that a Trump loss would tank the value of the stock, he also said that the “stock could do anything” if Trump wins. This could be a boon for the incoming president, who holds a 57% stake in the company. That means that as Trump Media’s market value balloons, as does his own net worth.