Trump Media stocks see 'stunning' rebound as market giddy over election chances: report

The value of Donald Trump's social media stock has nearly doubled in price as perceptions change about his chances for re-election.

Trump Media & Technology Group crashed to a record low of $12.15 per share on Sept. 23, an 82-percent crash from its high, but the value has rebounded by about 120 percent in the three weeks since, including a 50-percent spike last week, reported CNN.

“It’s really simple," said Matthew Tuttle, CEO of Tuttle Capital Management. "People realize that if Trump gets elected, this stock has the potential to do something, and if he doesn’t get elected, it probably goes to zero."

Trump's stake in the company grew from about $1.7 billion since Sept. 23 to just over $3 billion, and a financial expert described the spike as "stunning."

“Meme stocks thrive on attention, and in the case of Trump Media, the price also reflects the expectations of who will win the November election,” said Jay Ritter, a finance professor at the University of Florida who has studied capital markets for four decades.

The stock price remains far below its March peak of $66, when Trump's stake was briefly worth about $2 billion, and the share price has benefitted by the former president holding onto his stock instead of dumping shares after lockup restrictions lapsed last month.

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“If Trump was winning in the polls but you were convinced he was going to sell, you certainly wouldn’t see the move we’ve seen,” said Tuttle. “The fact he says he won’t sell – and that he actually hasn’t sold – provides the backdrop for the rally.”

Ritter still believes Trump Media is dramatically overvalued, saying it's only worth the cash on its balance sheet because it has never demonstrated a business plan to generate profits.

“At today’s stock price of about $25, the stock is overvalued by 1,000 percent or so, suggesting a 90 percent drop will eventually occur," Ritter said.