The stock's volatility during its first month of trading was "expectedly unexpected," said John Rekenthaler of Morningstar
Trump Media & Technology Group’s first month on the Nasdaq $NDAQ has been “abnormally volatile” — but that wasn’t a surprise to one expert. John Rekenthaler, vice president of research at Morningstar, summed up Trump Media’s first month on the Nasdaq as “expectedly unexpected.”
“It’s been abnormally volatile — as volatile as any stock I can ever recall being,” he said.
Trump Media, the company behind former president Donald Trump’s Truth Social, went public on the Nasdaq under the ticker DJT on March 26, after completing its merger with Digital World Acquisition Corp., a special purpose acquisition company, or SPAC.
On its first trading day, shares traded as high as $79.38. By the end of its first trading week, it had a market capitalization of more than $8 billion. One week later, shares began to free-fall following the disclosures of multi-million dollar losses from operations in 2023, the registered resale of substantially all of its outstanding securities, and the announcement of its own live TV streaming platform.
This was in large part because shareholders — many of whom are likely retail investors — traded more on sentiment, rather than actual business performance, Rekenthaler said. This puts Trump Media in the basket of so-called “meme stocks,” like GameStop $GME, AMC, and Reddit $RDDT. Meme stocks are company shares that become wildly popular online and are traded feverishly by retail and individual investors, sending prices soaring regardless of the company’s actual operating results or prospects.
Trump Media CEO Devin Nunes sent a letter to Nasdaq CEO Adena Friedman last Thursday and several congressional leaders this Tuesday, alleging that the company’s stock was being illegally traded in a practice known as “naked” short-selling — or the illegal sale of shares without borrowing them first. Nunes called on the congressional leaders to launch an investigation into what he said is the “unlawful manipulation” of DJT stock.
Rekenthaler said when a company talks more about its stock price and traders rather than its business plans, that it’s “not a good sign.” When Trump Media announced that it would launch a live TV streaming platform tied to its social media site Truth Social, the company’s stock plunged.
And Rekenthaler doesn’t expect the company’s stock volatility to change — so long as Trump stays in the public eye.
“I think anytime Donald Trump is in the news is oxygen for the stock, in any way,” he said.
He said the publicity around the former president’s ongoing criminal trial in New York over a “hush money” payment to porn star Stormy Daniels prior to the 2016 election could be a boon for Trump Media’s stock price. Trump has long denied any wrongdoing and allegations of an affair with Daniels.
“Obviously Donald Trump’s gonna be in the news, at least until the presidential election,” Rekenthaler said, “I think that should help the stock, even if the news isn’t necessarily favorable for him.”
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