Shares of Trump Media & Technology Group (DJT) were briefly halted on Tuesday due to volatility in late afternoon trading, as investors brace for more wild swings as Election Day gets underway in the US.
Shares quickly erased 15% gains, reversing Monday’s double-digit percentage gain to start the week.
The stock recovered somewhat from the steeper losses, but still closed down just over 1%.
Shares suffered their biggest percentage decline last week, closing about 20% lower to end the five-day period on Friday, shaving about $4 billion off the company’s market cap. The stock is still more than doubled from its September low.
The latest price action comes as investors await the results of the presidential election between Republican candidate Donald Trump and Democratic candidate Kamala Harris.
Volatility in the stock is expected to continue. One investor has warned that if Trump loses the election, DJT shares could fall to $0.
“It’s a binary bet on the election,” Matthew Tuttle, CEO of investment fund Tuttle Capital Management, recently told Yahoo Finance’s Catalysts.
Read more: Trump vs. Harris: 4 Ways the Next President Could Impact Your Bank Accounts
Tuttle, who currently owns put options on the stock, said the stock’s trajectory depends on the “buy the rumor, sell the fact” trading strategy.
“I imagine you would see this happen the day after he won,” he surmised. “If he loses, I think it goes to zero.”
Steve Sosnick, chief strategist at Interactive Brokers, said DJT has taken on a “life of its own.”
“It’s been volatile on the way up, and when a stock is that volatile in one direction, it tends to be that volatile in the other direction,” he said on a call with Yahoo Finance last week.
Before the recent volatility, shares in the company — home to the Republican candidate’s social media platform, Truth Social — had been rising steadily in recent weeks as both domestic and foreign betting markets shifted in favor of a Trump victory.
Prediction sites such as Polymarkt, Predict itAnd Kalshi everything showed that Trump’s presidential chances were greater than those of the Democratic candidate and current Vice President Kamala Harris. However, that lead narrowed significantly over the weekend, as new polls show Trump to surpass in Iowa who has historically voted Republican.
And as betting markets tighten, national polls shows both candidates in a virtually deadlocked race. Opinion polls in key states like Pennsylvania, Michigan and Wisconsin, which will likely determine the fate of the election, also show razor-thin margins.
