Since it dropped to its lowest value on September 23, Trump Media & Technology Group’s share price has risen 200%. Today, the company is valued at $8 billion, tripling in just five weeks.
Market experts claim the rise is driven by the prediction that Trump will win the election.
Performing differently than most companies, Trump Media is not a normal stock. It trades on hype and momentum and depends entirely on the Republican candidate’s political movements. The stock forecasts how traders think the election will turn out. “I’ve never seen anything quite like this. This company’s value is almost entirely based on the outcome of an election,” Gene Munster of Deepwater Asset Management said.
“It’s pretty straightforward: If Trump wins the election, it’s going to be worth more than the $8 billion it’s currently worth. And if he loses, it will be worth significantly less.” Munster said.
The company’s Q2 revenue was $837,000, an amount which is never normally associated with a company valued in billions.
The dominant shareholder in the company is Trump himself, who holds a stake of 114.75 million shares. The absurdly high share price is helped by the certainty that Trump will not sell his shares and has not disclosed any stock sales.
“If he’s not elected, what are you left with? A company that’s a few years old, modest revenue and essentially no profits,” he said. “If this were called Joe’s Media Company, we wouldn’t even be talking about it and it wouldn’t have a value anywhere close to this. The value is completely tied to the former president.” Munster concluded.
By CEO NA Editorial Staff
