Some retail traders view the stock as a bet on whether Trump would win a second term as U.S. president.
Shares of Trump Media & Technology Group (DJT), majority-owned by former US President Donald Trump, have fallen to record lows following the Republican presidential candidate's recent return to rival social media platform X and his dwindling lead in polls ahead of the upcoming presidential election.
Trump Media shares fell to $21.33 on Tuesday, down more than 4 percent. The stock closed down 3.7 percent at $21.42, marking its eighth straight session of losses.
Trump's shrinking lead in polls and election betting markets in recent weeks has also weighed on stocks, which some retail traders have seen as a bet on whether Trump would win a second term.
“I’ve always viewed Truth Social and DJT as a voting mechanism, not an investment mechanism,” said Lou Basenese, president and chief market strategist at MDB Capital in New York. “The valuation never made sense relative to the fundamentals.”
Earlier this month, Trump Media, whose main asset is the Truth Social app, reported a quarterly loss of $16.4 million on revenue of just $837,000. The company has a market value of about $4.3 billion, down from more than $8 billion at the start of this year.
The stock had hit an all-time high of $79.38 during its Nasdaq debut on March 26 following a merger with blank-check company Digital World Acquisition Corp.
Trump is expected to be eligible to begin cashing in on his nearly 60 percent stake, or 114.75 million shares, in his social media company when the insider trading blackout period expires next month.
“You always trade based on your odds of winning or losing, and that’s what we’re seeing now that the race is tight and the probability of you winning has narrowed. And I think you’re hitting historic lows also because you’re facing the insider lockout situation,” Basenese added.
Trump began posting on the X platform last week for the first time in nearly a year, coinciding with an interview with owner Elon Musk.
In recent weeks, Trump has lost his considerable lead in the polls over Vice President Kamala Harris, the Democratic nominee.
With 78 days until the Nov. 5 vote, contracts for a Harris victory are trading at 56 cents, with a potential payout of $1, on political betting platform PredictIt.
Trump's contracts are trading at 46 cents, down from 69 cents in mid-July.
