Former President Donald Trump's social media stock has experienced a significant decline in value just before the upcoming election, impacting his overall net worth. The stock saw an unprecedented surge in the past five weeks, primarily driven by market speculation surrounding Trump's chances of reelection rather than the company's actual performance. However, the stock has now plummeted, losing approximately 41% of its value in a mere three days.
Trump Media & Technology Group, the owner of Truth Social, witnessed a 13% drop in share price on Friday following a 12% decline on Thursday and a substantial 22% decrease on Wednesday. This recent downturn marks the company's most significant one-day loss since its initial public offering in March.
At the close of trading on Tuesday, shares were valued at $51, estimating Trump's majority stake in the company at around $5.9 billion. By Friday, the value of Trump's shares had fallen to $3.5 billion, resulting in a staggering $2.4 billion decrease in his net worth within a span of just a few days.
The company's shares, traded under the ticker symbol 'DJT,' have become a barometer for market sentiment regarding the presidential election outcome. Recent prediction markets have shifted towards forecasting Vice President Kamala Harris as the potential winner, despite polls indicating a closely contested race with no clear frontrunner.
According to Steve Sosnick, chief strategist at Interactive Brokers, meme stocks like DJT are particularly vulnerable to sudden shifts in momentum. He highlighted a noticeable change in the overall sentiment of prediction markets in recent days, influencing the stock's performance.
It is crucial to note that the company's financial performance and operations are not driving the stock's fluctuations. Trump Media did not announce any significant developments that could justify the sharp decline in its stock value.
