The stock performance of Trump Media & Technology Group (DJT, Financial) is closely tied to former President Trump's chances of winning the presidential election. Post-election, the stock is expected to face significant volatility as its market actions do not align with its business fundamentals. For the second quarter, the company reported revenue of $837,000 with a loss of $16.4 million, yet its market value stands at $6 billion.
Brian Lukow, a former Lehman Brothers senior vice president, stated that DJT is grossly overvalued, even if Trump wins the presidency. He suggests that if Democratic candidate Harris wins, DJT would be an ideal short target. The stock has garnered a passionate online following, including Trump supporters committed to holding the stock long-term. Some investors believe in DJT's potential for media mergers and acquisitions, which could drive prices higher if Trump is elected.
Due to the approaching election, DJT has experienced significant stock price fluctuations, halting trading five times last Friday and dropping over 21% for the week. Analysis firm S3 Partners highlighted that a Trump victory could increase the risk of a short squeeze. Moreover, DJT's stock options have seen a surge in trading volume, with 300,000 contracts exchanging daily over the past month and total options premiums reaching approximately $2.45 billion.
Traders anticipate DJT's stock to continue its wild swings in the coming days. Options pricing indicates a potential 50% price fluctuation by November 8.
