Since its recent debut, Trump Media & Technology Group has become a rollercoaster ride for investors, with sharp swings that leave even the most seasoned traders dizzy. The company, which owns Truth Social, has seen its share price soar to dizzying heights only to plummet just as quickly, making it a wilder ride than even bitcoin’s notorious volatility.
Former President Donald Trump, the company’s largest shareholder and chairman, has seen his fortunes yo-yo along with the stock. His net worth has taken a hit of over $2 billion since the company went public just two weeks ago, with one particularly bad day wiping out $1 billion of his wealth.
The extreme turbulence surrounding Trump Media can be attributed to several factors, including its close association with the former president. Trump’s polarizing nature and the intense media scrutiny surrounding the company have attracted a diverse range of investors, from retail traders to professionals, all contributing to the stock’s wild swings.
Experts point to Trump Media’s sky-high valuation as another reason for its extreme volatility. Despite posting losses of $58 million in 2023 and generating minimal revenue, the company was valued at a staggering $11 billion on its first day of trading. Such lofty valuations often lack a solid foundation, leading to rapid fluctuations in stock price.
Analysts note that Trump Media’s shareholder base likely includes a significant number of momentum traders, who can amplify market movements with their buy-and-sell actions. Additionally, as a newly public company, Trump Media lacks a solid trading history and faces restrictions on insider selling, further contributing to its erratic performance.
The scarcity of available shares has also made it challenging for skeptics to bet against Trump Media. Short sellers have struggled to borrow shares due to prohibitively high borrowing costs, making it difficult to profit from a potential decline in the stock price.
Ultimately, Trump Media’s fate remains closely tied to the political fortunes of its namesake. The company’s stock has become a battleground for investors betting on Trump’s future, with supporters and detractors alike driving its tumultuous journey in the market.
In the words of one observer, “This thing is going crazy” – and for now, it seems there’s no end in sight to the turbulence surrounding Trump Media’s stock.
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