Why Trump Media & Technology Stock Skyrocketed 120% in October

Shares of Trump media and technology (NASDAQ: DJT) surged last month on apparent anticipation of a Trump victory in Tuesday’s election, as the former president’s poll numbers generally improved over the month, as did his chances of victory, according to betting markets.

The parent company of social media app Truth Social has also released its streaming app Truth+ on multiple platforms including iOS, Android and the web, signaling the company’s split from Truth Social.

However, the main reason for the win seemed to be the bet on a Trump victory. The social media stock ended the month with a 120% increase, according to data from S&P global market information.

As you can see in the chart below, the stock rose for most of the month before giving up its gains in late October.

DJT data Ygraphs

Is the Trump trade back?

The performance of Trump Media & Technology stock has become highly correlated with Trump’s own prospects in the presidential race, as the company itself has little to offer investors at the moment as quarterly revenue is less than $1 million.

In the presidential race, the month was marked by a solid performance by Trump’s running mate, J.D. Vance, in the vice presidential debate and generally positive polling for Trump, leading to increasing predictions that he would win the election. On the gambling site Polymarket, a French trader bet more than $30 million on Trump’s victory based on his analysis of opinion polls.

Last Friday A New York Post article said that the rise of Trump Media was driven in part by the belief that Elon Musk could buy Trump’s struggling media company.

Spending a few billion dollars on a profitable social media company would be strange for Musk if he owns the Trump campaign.

Image source: Getty Images.

Can Trump Media Stocks Hold On to Their Gains?

The stock has retreated since last Wednesday’s peak on some evidence that Harris has clawed back some of Trump’s gains. The respected Selzer Poll also showed Harris leading in Iowa, a state considered safe for Trump.

Expect stocks to move wildly on Wednesday in response to the election results, even if the winner is not clear. The stock’s moves on Tuesday could also indicate who investors expect to win based on exit polls.

If Trump loses the election, stocks could go a lot lower. Even if he wins, it’s not clear how Trump Media will become a profitable company in a challenging media environment.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has one disclosure policy.