NEW YORK – Shares of Trump Media & Technology Group slumped to a two-week low on Nov 7, as speculative bets on Donald Trump winning the US presidential election lost steam a day after his victory.
The stock was nearly 20 per cent lower at 10.25am ET, on track to erase its 6 per cent gain on Nov 6 after majority owner Trump defeated Democrat Kamala Harris to secure a second White House term.
While Trump and Harris were neck and neck in most polls leading up to the election, online betting markets favoured the former president more, prompting investors to pile into “Trump trades” – securities that could benefit or come under pressure under his leadership.
That led to a 200 per cent surge in Trump Media stock in the six weeks before the election. The value of Trump’s stake in the company has grown by US$2.8 billion to US$4.1 billion in that period.
The stock attracted US$7.3 million in net inflows from retail investors on Nov 6, well below its record high of US$14.4 million on Oct 29 and other days leading up to Nov 6, according to data from Vanda Research, indicating trading in anticipation of election results was much higher than on the voting day.
Strategists have said Trump Media’s US$6.4 billion valuation is detached from fundamentals.
On Election Day, the company reported a net loss of US$19.2 million for the quarter ended September and a revenue of US$1 million. REUTERS
