Trump Loses $1.3 Bln in 48 Hours as Tech Meme Stock Plunges

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Ilya Tsukanov

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The former president’s internet company – Trump Media & Technology Group, has been on a highly volatile rollercoaster ride of highs and lows throughout the week, temporarily surging to a valuation of over $10 billion – about $600 million more than Elon Musk’s social networking giant X, on Wednesday before plummeting.

Nasdaq trading of Trump Media & Technology Group – which owns Trump social media app Truth Social, halted twice Thursday morning after plunging shortly after the start of the trading day.

Created in 2021, after major US social media companies banned Trump’s accounts, and taken public in March 2024 as the New York businessman secured his position as the Republican nominee, Trump Media & Technology Group has been on a rollercoaster ride throughout the year, hitting a peak valuation of $66.22 per share in late March, plummeting to as low as $12.15 in late September and climbing back up by more than 230% to $51 a share in trading earlier this week, and falling again to about $36 Thursday before trading was halted.

Some market analysts have connected the technology stock’s performance with bets on Trump’s chances of retaking the White House on November 5, pointing to the fact that the stock’s performance has correlated with bookmakers’ odds on the election, plus the businessman’s rallies (including a blowout Madison Square Garden event in New York City which briefly added over 20% to its valuation).

Republican presidential nominee former President Donald Trump, left, and Democratic presidential nominee Vice President Kamala Harris are seen on a screen during a presidential debate as people watch at One Longfellow Square, Tuesday, Sept. 10, 2024, in Portland, Maine. - Sputnik International, 1920, 31.10.2024

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Thursday was not the first time this week that trades in the Trump stock were throttled. On Tuesday, Nasdaq halted trading five times a series of rapid surges and drops.

Citing the fact that Truth Social remains largely a niche social media platform, with annual revenues in the millions of dollars, analysts have characterized Trump Media as a meme stock – i.e. a stock which gains or loses value not based on a company’s so-called market fundamentals, but its viral popularity.

Wall Street was taught a lesson about the power of meme stocks in early 2021, when hedge funds’ plans to short sell stocks of ailing US videogame retailer GameStop were temporarily hijacked by Reddit’s r/wallstreetbets, ballooning the company’s valuation and prompting brokerages to step in to block the average Joe from buying GameStop. The perceived manipulation of the market sparked a series of class action lawsuits, as well as a congressional hearing.

Just a few trading days are left before Election Day November 5, with traders bracing for market volatility in response to whoever wins next Tuesday. Polling aggregator RealClearPolitics gives Trump a slight lead nationally well within the margin of error, with the former president leading in battleground states including Georgia, North Carolina, Pennsylvania, Ohio, Arizona, and Nevada, but trailing Kamala Harris in Michigan, Wisconsin, Minnesota, New Mexico and Virginia.