Yesterday’s conviction of former President Trump led to speculation both ways on Trump Media (NASDAQ:DJT) stock.
Trump Media rose 0.7% overnight after rising 1.3% on May 30, before the verdict on 34 counts of falsifying business records came in.
In the last hour before the market opened this morning, new buy orders came in, sending shares to $54.81, a rise of about 6%.
Verdict Not Final
The lack of movement overnight doesn’t mean the stock was not volatile. Shares fell below $47 in after-hours trading as the verdict was announced, but they recovered steadily overnight. Since coming public in March, shares have traded for as much as $79 and for as little as $22 per share.
Trump Media has little revenue and enormous losses. It trades more as a proxy for the former president than as a going concern.
The lack of reaction to the verdict by investors indicates many are waiting for a final verdict on the former president. That will be made by voters in November. If he is re-elected, it will be good news for DJT stock. If he loses, the stock could fall to zero.
One reason for the stock’s recovery was the speed with which wealthy Republican donors rallied around the candidate. Tesla (NASDAQ:TSLA) CEO Elon Musk, Las Vegas Sands (NYSE:LVS) heiress Miriam Adelson, and Blackstone (NYSE:BLK) CEO Stephen Schwarzmann all also pledged their support. SPAC sponsor Chamath Palihapitiya and venture capitalist David Sachs will host a fundraiser on June 6. Analysts say the billionaires are drawn by Trump’s support of tax cuts and less regulation.
Trump Media’s Truth Social site has seen a noticeable drop-off in traffic recently. Traffic in May was 21% below that of April and 35% below that of March.
Trump Media Stock: What Happens Next?
Expect continued volatility in Trump Media stock until Nov. 5, when Americans vote for President and other federal offices. It’s going to be a bumpy ride and, for some speculators on both sides, a profitable one.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
