In recent weeks, shares of Trump Media Group (DJT, Financial) had nearly doubled in value. However, the stock experienced a sudden plunge, causing trading to be temporarily halted before resuming five minutes later. Despite an initial rise to a recent high of $33.85, DJT closed the day with a 9.6% loss.
The stock's sharp decline took the market by surprise and may be linked to a business investment involving the Trump family. On the same day, the Trump-initiated cryptocurrency project, World Liberty Financial, launched its token sale. Unfortunately, the platform crashed shortly after going live due to overwhelming interest, drawing 72 million unique visits within the first hour.
Although World Liberty Financial resumed operations and successfully sold 532 million of the 20 billion tokens available, investors remained wary of the connection between the website's crash and DJT's stock drop. Some speculated that short sellers may have contributed to the decline.
Short sellers have been a point of contention for DJT, with the company previously complaining to the Nasdaq exchange about being a victim of market manipulation due to short-selling activities. Despite the stock's fall, some investors expressed confidence in DJT on its Truth Social platform, suggesting that the market would soon correct itself against short sellers.
According to FactSet, DJT's trading volume saw a dramatic increase, reaching approximately 97 million shares, compared to an average daily volume of about 20 million shares over the past month. The exact cause of the stock's volatility remains uncertain.
