Trump Media shares rally ahead of debate clash
1:58 pm Tuesday, September 10th, 2024
By Noel Randewich
(Reuters) – Shares of Trump Media & Technology Group, majority-owned by former U.S. President Donald Trump, surged for a second day on Tuesday ahead of a debate between the Republican presidential candidate and Vice President Kamala Harris.
The stock jumped over 4% and lifted the value of Trump’s stake in the company to $2.2 billion days before he and other insiders will be allowed to sell their shares for the first time since the company’s public listing in March.
Trump and Democratic candidate Harris meet for the first time on Tuesday night in their only scheduled debate, a clash that could prove pivotal in their neck-and-neck race for the White House.
Including gains on Monday, the stock is up about 11% this week.
“It’s definitely a proxy for excitement ahead of the debate and hopes that Trump is going to do well tonight,” said Dennis Dick, a trader at Triple D Trading in Ontario, Canada. “You’ve got Trump supporters saying, ‘I’m going to buy DJT because I support Trump’, like it’s a statement.”
The bounce in the shares of Trump Media, which owns the Truth Social app, follows weeks of declines that sent it to record lows last week as Harris narrowed or erased Trump’s lead in polls ahead of the Nov. 5 election.
The debate follows a poll published on Sunday showing Trump up one percentage point against Harris at 48%-47%.
With eight weeks left until the election, contracts for a Harris victory are trading at 53 cents, with a potential $1 payout, on the PredictIt politics betting platform. Contracts for a Trump win are at 52 cents.
Trump Media saw its value briefly balloon to nearly $10 billion following its stock market listing in March, lifted in part by Trump supporters and traders betting he would win the election.
Strategists say Trump Media’s stock market value, now at $3.8 billion, is unrelated to its business fundamentals. For the June quarter, Trump Media reported a loss of $16.4 million and revenue of $837,000 – equivalent to the sales of two Starbucks stores.
According to provisions related to Trump Media’s listing, Trump and other insiders will be allowed to sell stock beginning later this month, potentially flooding the market with additional shares.
If the stock price remains at or above $12 for any 20 trading days commencing Aug. 22, then Trump will be free to sell shares beginning on Sept. 20. Otherwise, he is eligible to sell shares beginning on Sept. 26. The stock was last at $18.85 on Tuesday.
(Reporting by Noel Randewich; Editing by Angus MacSwan)
