Former U.S. President Donald Trump lost $2.4 billion in just three days as shares of Trump Media took a sharp downturn.
After a five-week surge, shares of Trump Media & Technology Group (DJT)—Trump’s media company—have dropped 41% over the past three sessions. On November 1, the stock fell by 14%, following earlier drops of 12% and 22% on the previous two days.
This decline has brought the company’s market cap down to $6.1 billion. Trump’s share in the company is now valued at $3.5 billion, down by $2.4 billion since October 29.
Trump Media & Technology Group stock movements over the past month.
Recently, Trump Media’s stock has been seen as a barometer for investor sentiment on the U.S. presidential election. Before its drop, the stock had surged more than 200% since late September, driving the company’s market cap up to $10.3 billion, surpassing Elon Musk's platform, X. However, recent activity on Wall Street suggests investors may now be betting on a win for U.S. Vice President Kamala Harris, despite polling showing no clear frontrunner.
“Meme stocks, including DJT, are highly sensitive to non-fundamental fluctuations,” said Steve Sosnick, a strategist at brokerage firm Interactive Brokers. Meme stocks are those bought by retail investors without regard to business performance. Trump Media also saw a sharp decline in July after President Joe Biden paused his campaign, leading investors to speculate that Trump might face significant challenges in a showdown with Harris.
Trump Media remains unprofitable, with second-quarter revenue of only $837,000 and year-to-date revenue of $1.6 million. According to Similarweb, Facebook has monthly active users 200 times higher than Trump Media’s Truth Social, while X has 100 times more, and Threads 20 times more.
“If Trump wins re-election, Trump Media’s outlook would be very bright. Truth Social could become a key media outlet for the U.S. president,” Sosnick said.
However, if Trump loses, Trump Media could face a sell-off. "This stock will plummet. I don’t think its valuation will remain in the billions,” warned Gene Munster, co-founder of venture capital firm Deepwater Asset Management.