With the presidential election just one week away, Trump Media & Technology Group (DWAC) stock has been on a hot streak.
Trump Media, the company that owns former President Donald Trump’s right-wing social media platform Truth Social, has managed to reverse nearly all of the share value losses it has suffered since it went public on the Nasdaq in late March. This latest rally has made it a $10 billion business — even with less than $1 million in revenue in the latest quarter.
“I think it’s pretty clear, it’s pre-election euphoria,” said John Rekenthaler, vice president of research at Morningstar (MORN). “There’s just no conceivable way the business could justify the stock price.”
The former president and Republican presidential candidate is a majority shareholder of Trump Media, with a roughly 57% stake in the company — holdings he has said he has no plans to let go of. Much of the trading of DJT stock is a result of people’s fanaticism for the former president, making it what Rekenthaler calls an “affinity stock.”
“This is the most emotional stock on the stock exchange,” he said.
Trump Media itself has said in regulatory filings that its “success depends in part on the popularity of its brand and the reputation and popularity” of Trump and that “adverse reactions to publicity relating to [Trump], or the loss of his services, could adversely affect TMTG’s revenues and results of operations.”
With some polls showing Trump with a slight edge over Democratic presidential candidate and Vice President Kamala Harris, that affinity has snowballed in recent weeks.
Trump Media shares surged almost 22% on Monday and closed at $47.36 following Trump’s campaign rally at Madison Square Garden in New York on Sunday. The event included a series of speakers who made disparaging remarks about several groups, including offensive comments aimed at Harris.
Trading of the company’s stock was temporarily halted three times after market open Tuesday due to volatility, as some 16 million DJT shares changed hands within the first 10 minutes of trading. Shares continued to climb during morning trading, pushing upwards of $50 per share.
In the past 30 days, Trump Media shares have skyrocketed nearly 220% — a rally fueled by this election excitement and renewed fervor around the Trump campaign, with the help of Elon Musk’s vocal support.
The Tesla (TSLA) and SpaceX CEO has made himself a close ally of Trump’s in recent months, speaking alongside him in Butler, Pennsylvania, and delivering a series of pro-Trump speeches elsewhere in the swing state — and in New York on Sunday.
Musk, the richest man alive with a net worth of more than $270 billion, has also donated tens of millions of dollars to his pro-Trump “America PAC,” which has been organizing canvassing efforts in battleground states. That has included a pledge to give away $1 million to people that are registered to vote and sign a petition in support of “free speech & right to bear arms.” Philadelphia’s district attorney sued Musk and his super PAC Monday over the giveaway.
While Rekenthaler believes the stock would lose all value if Trump were to lose a second straight election on Nov. 5, a victory could send the stock soaring to new heights.
“I believe this stock is going to zero if he loses,” Rekenthaler said, “and I believe this stock could do anything if he wins.”