Trump Media stock surges 12% pre-election

Donald Trump’s social media company, Trump Media & Technology Group, saw its stock surge by 12% on Monday, the day before the presidential election. The stock has been highly volatile since going public, with traders using it as a barometer for Trump’s perceived reelection chances. There was no clear reason for Monday’s increase, and the company’s shares do not trade based on its business fundamentals, which are small compared to social media giants like X, TikTok, and Instagram. However, market analysts have linked the stock’s recent rise to trends in online betting markets, which have given Trump an edge over Vice President Kamala Harris in the race. When Harris’s chances improved in these betting markets, Trump’s media stock began to decline. But Monday’s gains added more than $400 million back to Trump’s net worth. The broader market also showed some movement on Monday, though less dramatic than Trump’s media stock, with the Dow falling 0.6% and the S&P 500 and Nasdaq both falling 0.3%. As the first polls began to open across the U.S. on Tuesday, shares of Trump Media and Technology Group surged again by 12% in pre-market trading. The rise reflects renewed investor interest ahead of the election, where the stock is seen as a proxy for Trump’s chances against Harris. Much of the trading in DJT stock is driven by the former president’s fervent supporter base, making it what Morningstar’s Vice President of Research John Rekenthaler calls an “affinity stock.” Despite the volatility, no material changes to Trump Media’s operations have been disclosed. In the past 30 days, shares have risen almost 90%, adding billions to the company’s market value and increasing Trump’s net worth, as he holds a roughly 57% stake. Trump has indicated that he has no plans to sell his holdings. Rekenthaler warned that Trump Media’s stock could suffer if the Republican candidate lost the election, but if Trump were to win, the stock’s performance could be unpredictable.

Stock volatility influences Trump’s net worth

As the vote count progresses, national and swing state polls continue showing a tight race between Harris and Trump. Former President Donald Trump’s net worth has doubled this month, increasing from under $4 billion at the start of October to $8 billion by Tuesday. This surge coincides with the significant rise in the stock price of Trump Media & Technology Group. On Tuesday, Trump Media’s stock closed up nearly 9% at $51.51, marking a more than threefold increase since the beginning of October when the stock was valued at $16.16. This dramatic rise in stock price has substantially boosted Trump’s net worth. The increase seems to be largely influenced by his rising odds in the presidential election rather than any immediate improvement in Trump Media’s financial performance. Investors appear more optimistic about Trump’s chances of winning the election, contributing to the surge in stock prices. Trump’s net worth has shown significant volatility tied to the performance of Trump Media’s stock. The stock hit a record low of $12.15 just five weeks ago but has since quadrupled. The stock rebounded substantially after Trump publicly announced that he would not sell his 57% stake in the company. The stock’s recent performance has returned to levels seen in March and May following its debut on the Nasdaq. Trump’s increase in net worth highlights the volatile nature of the stock market, especially in terms of political factors. As Trump’s chances in the presidential race improved, the media company’s stock price and, consequently, his net worth significantly boosted.