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Shares of Trump Media & Technology Group (DJT-3.31%) sunk nearly 20% on Wednesday, putting an end to a weeks-long rally that saw the company’s stock climb more than 200% in a month.
Trump Media stock traded at around $41 each at mid-day, shaving off considerable value since shares closed at $51.51 on Tuesday. It wasn’t immediately clear what prompted the decline in share value.
Despite the dip, shares of Trump Media, the company that owns former President Donald Trump’s right-wing social media platform Truth Social, were up more than 160% over the last 30 days. The company currently has a market capitalization of $7.96 billion, and generated less than $1 million in revenue in the latest quarter.
Much of the excitement around DJT is driven by what Morningstar’s (MORN+0.53%) vice president of research John Rekenthaler called “pre-election euphoria.” Shares of the company, where the former president and Republican presidential candidate is a majority shareholder with a roughly 57% stake, have become something of a proxy for his election odds.
With the election in less than a week, DJT stock has become a way for Trump fans to buy into the former president and express their support for him financially, which Rekenthaler says makes DJT an “affinity stock.” Trump’s net worth has more than doubled to about $8 billion as a result of the Trump Media rally, according to Forbes.
For his part, Trump has said he has no plans to get rid of his shares in the company, despite the end of a six-month share lock-up agreement last month. That bodes well for the company — and its stock — as the election nears.
Trump Media itself has said in regulatory filings that its “success depends in part on the popularity of its brand and the reputation and popularity” of Trump and that “adverse reactions to publicity relating to [Trump], or the loss of his services, could adversely affect TMTG’s revenues and results of operations.”