The company that owns Trump Media & Technology Group's (DJT, Financial) new social media venture, Truth Social, experienced a nearly 10% drop in its shares on Tuesday. It closed at $27.06 after some volatile trading that led to a temporary trading halt mid-session. Earlier in the day, the stock had risen over 13%, but when trading was halted, the stock was down more than 6%. This was the stock's most active day since it moved to Nasdaq in late March, following a shift from the NYSE due to a merger with a blank-check company, turning over more than 97 million shares.
The wild swings in Trump Media's stock occur at a time when the company, in which the former president holds a majority stake, finds itself in a highly polarizing environment. Trump, who owns nearly 57% of the company as of a recent regulatory filing, has an estimated stake of about $3 billion. Thanks to a lockup period that prohibited insiders from selling their shares until September 19, Trump has not agreed to sell his stocks.
Fluctuations in Trump Media's valuation also correlate with changes in Trump's forecast on betting websites for the presidential election against Kamala Harris, the Democratic party nominee. It appears that the movement in the shares is not only an economic event that reflects primary economic forces but also a political event itself. Many of Trump Media's actual shareholders are individuals who support Trump and are now investing in the company to show their backing. The recent sell-off by another significant investor, United Atlantic Ventures, which sold almost all its stocks, around 11 million, has only made the stock's future trend even more unpredictable.
